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SECONDARY SALES INCREASE IN THE LUXURY CONDOMINIUM MARKET

By on Nov 07, 2007 in Residential

The  number of secondary sales  in the Bangkok condominium sector has increased significantly over the last twelve months as developments near completion, according to the latest  report on the  Bangkok Condominium Market published by CB Richard Ellis Thailand, the leading property consultant.

In the upper middle and luxury condominium sector there have been fewer new launches and so the total number of primary sales by developers has fallen.  Developments sold off plan several years ago are approaching completion.  Purchasers who did not want to take the development risk of purchasing a condominium off plan are now looking at these projects as they can now see the finished product.

One example of a project where there has been a significant increase in the number of resale is Athenee Residence on Soi Ruam Rudee developed by TCC Capital Land Limited.

The average price of the primary sales by the developer at the launch stage in December 2004 were around 100,000 baht per square metre.

Today, units in the development are being resold at prices ranging from 120,000 to 142,000 baht per square metre.

 “There have many re-sales at Athenee Residence on Soi Ruam Rudee next to the Plaza Athenee Hotel which will soon be ready to transfer title,” said Ms. Pornpimol Phuengkhuankhan, Senior Manager for Residential Sales Services at CB Richard Ellis Thailand. 

“This is one of the few new freehold condominium developments in the Central Lumpini area.  Purchasers recognize that there is a very limited supply of luxury condominium projects in the Central Lumpini area and that if a developer lunches a new project in this location prices are likely to be significantly higher than current levels.”
The supply of completed condominium units in downtown Bangkok rose to 48,490 units by mid 2007.  The overall vacancy rate was 13.9% compared to 15.9% in the first quarter even with the completion of two developments.

The fall in the vacancy rate, despite the increase in supply shows that there is a healthy end-user market from both occupiers and tenants.

Prices for new luxury and upper middle level projects rose by 9.3% over the last year.  “We do not think that prices for luxury condominiums are inflated in Bangkok” said Khun Pornpimol.  “The pricing of new developments has been driven by increasing construction costs and higher land prices rather than developers margins!”

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