Over the past 2-3 years, developers have been focusing on launching new housing and condominium supply in downtown Bangkok. CBRE Research reveals that there are around 30,000 units in downtown Bangkok from condominium projects launched between 2016 and 2018.
One major challenge faced by the housing and condominium markets is that the cost of investment has been increasing along with the hike in land prices, leading to escalating asking prices. CBRE found that 70% of buyers in the luxury residential market are Thais who have recently made purchases for own-living and long-term investment purposes rather than for short-term investment. Meanwhile, 40% of purchasers of residential properties priced below THB 10 million are foreigners.
As many residential developers concentrate on building projects within Bangkok, the new supply of resort properties in Pattaya, Hua Hin, Chiang Mai, Khao Yai, and Phuket, especially in the high-end segment, has decreased. Therefore, there has been pent-up demand as there are fewer new projects being launched.
CBRE also found that there is growing demand this year for resort properties in top resort destinations, and buyers in this segment are ready to make purchases for own-use and long-term investment purposes. "Although prices are higher, if projects are on the beachfront or with ocean views; with five-star hotel management; or with attractive rental guarantees, buyer response and sales performance have been positive for luxury and super-luxury projects launched in 2019. Some good examples include the Residences at Club Med Krabi and the Residences at Sheraton Phuket Grand Bay, which have an average price per square meter of THB 185,000 and THB 230,000, respectively. Both projects saw impressive sales performance at around THB 300 million during a 3-day event in Bangkok. Their updated sales rates are now 85% and 65%, respectively", said Ms. Prakaipeth Meechoosarn, Director – Head of Resort Property Sales, CBRE Thailand.
Veyla Natai Residences, which was launched this year and comprises THB-67-to-98-million pool villas on Natai beach, Phang Nga, reached a sales performance of 50% in less than a month, even without show units. MGallery Residences MontAzure Lakeside and Twinpalms Residences MontAzure, with an average of THB 150,000 – 180,000 per square meter, have also shown impressive sales revenue reaching THB 300 million in the first four days of its launch in Bangkok in August 2019, especially for Twinpalms Residences MontAzure which has now reached a sales rate of 80%.
These impressive sales performances prove that demand is still strong for resort properties in prime locations that can generate good returns and have the potential for value appreciation in the future. This is backed by being in sough-after locations and professional property management by leading hotel brands.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE established an office in Bangkok in 1988, followed by its Phuket office in 2004. CBRE Thailand has grown to be the leading real estate services provider, offering a broad range of integrated services, including property sale and leasing, facilities, transaction and project management; property management; investment management; appraisal and valuation; and strategic research and consulting. Please visit our website at www.cbre.co.th