Best real estate Bangkok

Bangkok is seen as a great value for money, not just on property but all the other services such as health car, restaurants and general life style; Prices/m2 in Bangkok's inner-city condominium market have increased significantly during the last two years. Year 2005 was an exciting time for the condominium industry, as many new luxury projects entered the market. These projects are concentrated around three major expatriate areas in Bangkok: Sukhumvit, Central Lumpini, Ploenchit and Silom/Sathorn. Now, buyers will have to pay Baht 81,597/m2 on average compared to 72,596 baht/m2 in the last twelve months to acquire a condominium in the central area of Bangkok with average prices in the Silom/Sathorn and Central Lumpini areas up to almost Baht 100,000/m2. Prices at some select projects approached Baht 130,000/m2, a level rarely achieved in the past. The first half of 2006 has shown high transaction activity in the inner-city Bangkok. Over 4,282 condominium units were launched to the market plus a number of high profile developments to be launched this year. International Joint Ventures and listed developers dominate the industry.

This price increase is largely attributed to rising construction and material costs, along with higher land prices and financing costs to the developers. In the lower-priced segments of the market, developers have started to build outside the inner-city, while in the middle-income segment, developers have reduced unit sizes to maintain affordability of their project. In the high-end segment, developers are proposing high quality buildings, taller with more amenities, to extract the maximum value of the few remaining prime land plots in the most central areas of Bangkok.

Take-up rates, a measure of the percentage of units sold, have continued to improve over the past 2 years. In 2004, 64.7% of units under development were already sold. Fewer launches have helped to reduce inventories in 2005, and take-up rate improved to 7.2% . In Q1 2006, almost 80% of the units launched since 2003 were sold. This rate has shown a continuous improvement since Mid-2005 with strong demand absorbing new launches and inventory. Current inventory of 3,900 units represents less than six months of sales.
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Recent changes in BMA regulations and investment in mass transit lines (actual and planned) have also boosted interest in some areas along Rama III and Payathai mainly. The Riverside area has also emerged as the main challenger to Sukhumvit and has seen the highest growth in 2005-06 with almost 2,000 units launched along the Chaopraya River. 26% of the total new supply under development is currently located on the river. Prices of condominium along the River have escalated over the last twelve months from 63,141/m2 to Baht 69,867/m2. Today it is very difficult to secure a unit with panoramic river views in a premium riverside development for less than Baht 80,000-85,000/m2. However this is still 30% less than prime condominiums in the neighboring central business district of Bangkok, and one third of the price of "Sails@Marina" riverside development recently launched in Singapore.
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1,058 condominium units were completed in Q1 2006, raising the total completed stock to just under 38,000 units. We expect another 2,800 units to be completed in 2006, mainly in the Sukhumvit and Silom/Sathorn areas. Looking at the rentals achieved in those newly-completed condominium units, owners can expect to generate approximately 550-750 Baht/m2 per month, giving a gross rental yield of about 6-8%, higher than in other major Asian cities such as Singapore and Hong Kong. Variations occur based on direct surrounding, construction quality, views and interior design.
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For the serviced apartment sector, the market remains competitive and competition will be strong, hence the supply of serviced apartments will increase by about 1,400 units for the 2004-2005 period. Most developers are developing new projects mainly in the Sukumvit area of Bangkok, where demand is dominated by expatriates. However, the average occupancy rate will remain stable, including the rents in the central business district of Sukumvit while serviced apartment rents in the central Lumpini area will increase due to the limited supply there, CB Richard Ellis (Thailand)'s executive director James Pitchon said. The situation is positive for developers but negative for tenants because demand continues to grow but supply is still very low, thus rents will tend to further rise.
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The latest high-end developments introduced to the market have demonstrated good sales results. Unsold stock of premium units currently stands at 1,200 units and the majority of this stock is from projects that still do not show sufficient evidence of construction. Prices of luxury condominiums in Bangkok are still 1/3 of regional capital cities, and rental yields are among the highest. As demand for condominiums is supported by strong growth from expatriates and local investors and continuing increases in development costs, prices in the luxury segment will follow the upward trend. New launches expected in 2006 and 2007 will receive a positive response in central locations, where available stock will be taken up as construction progresses.
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