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Investments Paying Off

By on Aug 02, 2010 in Residential

Published on The Nation dated 2 August 2010 by Somluck Srimalee

City condominiums generating returns of 5 to 10 percent

Residential property, especially city condominiums, is emerging as a popular choice for investors, with returns for those buying condos for the purpose of renting them out currently averaging between 5 and 10 percent a year, property experts said.

Those buying condos for resale purposes are seeing returns on investment of between 10 per cent and 50 percent, reflecting a typical lapse of from one-and-a-half to two years between pre-sales and completion, the experts said.

According to a survey by Major Development, return on investment for condominium projects on Sathorn and Silom roads was 5 to 6 percent in the first quarter of this year, depending on unit size and location. Condo resale prices on Sathorn and Silom returned an average of 5 to 10 percent for those units resold before construction was complete. For completed units, resale is generating return on investment of between 20 and nearly 50 percent, depending on the location.

On Phya Thai Road, landlords are seeing returns on investment of 5 to 5.5 percent after charging rents of between Bt435 and Bt625 per square meter.

Re-sales on Phya Thai Road transacted in the period up till project completion are generating returns of between 5 and 19 percent, according to the experts.

Major Development managing director Dr Suriya Poolvoralaks said investors looking to buy residential property for the purposes of renting the units out or reselling them comprise about 30 percent of total homebuyers. Most of these investors are less concerned about price than they are about location, floor-level, and view. In this, they differ from people buying residences to live in. This group is concerned about price, raw materials used and amenities.

Meanwhile, CB Richard Ellis (Thailand) managing director Aliwassa Pathnadabutr said the resale market for residential property in Bangkok’s central business district is generating average return on investment of 10 percent, some units doubling this, depending on location and facilities.

Typical condominium prices range between Bt3 million and Bt5 million, with one-bedroom units the most popular right now, she said.

Prices on Sathorn Road are high right now, she said, averaging Bt200,000 per square metre.

Aliwassa has been the Managing Director οf CBRE Thailand for a number of years. As a Thai national, Aliwassa is extremely knowledgeable about the sale of property in Thailand, specifically large scale high value condominium developments largely in Bangkok.

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