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Majority of New Supply Continues to be One Bedroom Condominium

By on Nov 14, 2012 in Research

Bangkok Residential MarketView, Q2 2012

THE  MAJORITY  OF  NEW  SUPPLY  CONTINUES  TO  BE  ONE BEDROOM UNITS WITH THE MOST DEMAND FOR A LARGER LIVING AREA GOING TO THE LOW RISE HOUSING MARKET.

There were limited  new launches in the downtown market as rising land  prices  meant  that  new developments are priced at levels that  are  only  affordable  for  a small  percentage  of  purchasers. There have been significant price rises  for  the  handful  of developments  that  are  seen  by the  Thai  market  as  being  the best-located best-quality projects.

Both the downtown and midtown markets  continue  to  be dominated by Thai purchasers.

CBRE  believes  that  the  mid market will continue to be a one bedroom  market  especially  as extensions  to  the  mass  transit systems  makes  more  areas accessible  presenting  some opportunities  for  condominium development especially along the purple and blue lines.

Most  of  the  new  downtown project  launches  in  the  first  six months of 2012 have been one- bedroom  developments,  but  it  is becoming increasingly difficult for developers  to  acquire  land  at prices  which  make  the  units affordable.  The  more  expensive the units become, the smaller the size of the potential market.

This  is  because  generally  the market  is  being  driven  by  end-users  rather  than  speculators  or buy-to-rent  investors  and  about 85%  of  purchasers  of  off-plan units are Thais.

The  midtown  market  appears  to be increasingly driven by end user purchasers  who  are  almost  all Thais.  This  means  that  there  is  a maximum range of budgets which seem  to  range  from  one  million baht to around three million baht, depending  on  size  and  location. The  legal  minimum  size  is  20 metres  but  few  developers  have built  units  below  25  metres  and only  in  cases  where  keeping  the price  close  to  a  million  baht  has been the objective or where there is  a  direct  link  to  a  mass  transit station.

Each location has a finite amount of  demand  and  which  areas  are the  most  popular  continues  to change,  in  some  case  there  is  fresh  demand  in  locations  that were  popular  two  to  three  years ago once the units in projects that were sold at that time have been occupied.

This is an extract from Bangkok Residential MarketView Q2 2012, click to download the full report.

Toby has been living in Bangkok for a number of years and has a strong research background. With his years in Thailand Toby brings a wide range of property knowledge to his research writing

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