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Thailand: Boom of Luxury Residential Construction Market

BANGKOK/THAILAND, June 8 2015 – The number of new condominiums in Bangkok’s central business district is expected to surge 64% to 12,000 units this year, 70% of them driven by the high-end and luxury segments, according to property consultancy CB Richard Ellis (CBRE), Thailand.

Rendering of the rooftop pool at a new condo project in Bangkok

Rendering of the rooftop pool in Bangkok's
new "The Lofts Ekkamai" project, which is
currently under construction at famous
Sukhumvit road. | Photo: Raimon Land

As the Bangkok Post reports, citing a survey carried out by CBRE, Ms. Aliwassa Pathnadabutr, Managing director for Thailand, said projects for new condos in the central business district rose by 62% year-on-year in the first quarter to 2,008 units, 60% of them high-end and luxury projects in prime locations. “High-end and luxury supply is considerably less than in the mass market, but the absorption rate is relatively high at more than 80%,” she said. CBRE categorizes “high-end” as 120,000 to 200,000 baht a square meter or above 5 million baht a unit, “luxury” as 200,000 to 300,000 baht per m² or above 10 million baht a unit and “super luxury” as above 300,000 baht per m² or 20 million baht a unit. Ms Aliwassa forecasts some Central Business District condo prices will hit a high of 350,000 baht per m² this year. Currently, one US $ is worth 34 Thai Baht (THB).

Stable Political Climate Helps

She said foreign investors from Hong Kong, Taiwan and Singapore were interested in buying luxury condominiums in Bangkok’s inner city because the prices were cheap compared with their home countries, where prices can exceed 1 million baht per m². A stable political climate is a major factor drawing foreigners back, some of whom buy condos in Bangkok for investment purposes. “The number of units CBRE sold to foreigners rose from 18% in last year's fourth quarter to 22% in this year's first quarter,” Ms Aliwassa said. CBRE plans to add China and India to its sales agents' target lists this year, while Hong Kong, Taiwan and Singapore remain road show