Bangkok condominium buying has declined from dizzying heights of the mid-2010s. That being said, the local real estate market hasn’t ground to a halt either. Activity remains in certain segments with most transactions being a product of shifting needs, discounts or both.
“Since the work from home culture has become a normal part of everyone’s life, space is becoming an increasingly important factor, even potentially out-weighing previous priorities, such as distance to public transportation,” Lazudi Executive Sales Director Chomratkamol Soontorntarawong (Khun Gor) states. “The high-end condominium market is continuing to show a lot of activity. This buying attitude seems to be reflected in larger global buying trends. The demand for Grade A quality buildings is the most consistent, particularly in the form of branded residences.”
Lazudi has been monitoring both the shifting needs of buyers in Bangkok as well as what homebuilders are doing in light of the current situation. Discounts have been an important tool for developers, but Khun Gor adds an overall shift in strategy to selling finished but unsold inventory has kept the market moving.
“This year saw the lowest number of new condominium launches in Bangkok over the last 10 years. It has been beneficial as the market was given an opportunity to absorb stock and ease any concerns of over-supply. Promotion units, additional discounts, transfer fee waivers and furniture packages are all tactics we’ve noticed,” Lazudi Consultant and Commentator Alex Blencowe reports. “Overall, prices have remained largely unaffected after an initial burst of discounts during the first COVID-19 wave.”
Alex also points out with this strategy being applied to projects across Bangkok, it is best to focus on locations and segments with the most market activity and price consistency. Projects in central city locations, such as Sukhumvit, Sathorn/Silom and along the Chao Phraya River, from well-known developers continue to draw the most interest.
“Our foreign market has seen a mixture of buyers who are comfortable purchasing sight unseen looking to build their overseas investment portfolio and expats currently living in the city shopping around for deals. Both groups are confident long term with the Thailand market,” Alex explains.
And there are reasons for this confidence. Bangkok is still a developing city with a huge emphasis on growing infrastructure. Alex cites under construction transit lines, hospitals and mixed-use developments as projects which will likely support a real estate market recovery moving forward. However, investors, especially those focused on buy-to-let properties, also need to understand the short-term realities.
“In the short-term, buy-to-let investors should be wary of a cooling rental market as everyone is looking for a ‘special’ discount during this unprecedented period,” Khun Gor says. “Longer term, when a level of normality returns, there will inevitably be a bounce back on rental prices. Whilst yields might be dropping in today’s market, capital prices have seen relatively little movement, which is perhaps unexpected to some.”
What’s next for the Bangkok property market?
While Bangkok condominium buying is currently driven by shifting needs and discounts, those looking for what’s next may want to turn their attention to Rama IV. Once seen as the area between Sukhumvit and Silom/Sathorn, it is being transformed into the city’s next hub.
“Rama IV has four mixed-use, super-projects coming along with a wealth of new opportunities. These mixed-use spaces will offer Grade A offices along with new luxury condominiums, retail spaces, hotels, serviced apartments and convention halls,” Alex notes. “The crown jewel of these upcoming projects is One Bangkok. This enormous THB120 billion fully-integrated district is the largest private sector property development in Thailand’s history.”
An interesting aspect about One Bangkok and a handful of other developments is the fact residences are only available on a leasehold basis. The impact of this is something Alex believes bears watching.
“Units in both One Bangkok and Dusit Central Park are only available on leasehold terms. It is the same for the recently completed Sindhorn Village,” Alex says. “Attitudes towards leasehold in this segment will be worth watching as it is a huge disadvantage in the eyes of some foreign buyers despite the difference in ownership usually reflected in the price.”