Leading real estate agency CBRE Thailand’s has reported that although the political turmoil and economic slowdown since late 2013 has cast a cloud over the real estate industry in Thailand, it has had a minimal impact on the high-end condominium market, especially regarding luxury and well-located projects. The decrease in new luxury condominium supply and a continued strong demand as well as the high purchasing power of buyers was cited by CBRE as the main reasons for this.
Aliwassa Pathnadabutr, Managing Director of CBRE Thailand, commented: “In Q4 2013, there were 4 new condominium projects officially launched and represented by CBRE Thailand with a total of 1,369 units offered for sale. We managed to generate a total sales volume of over THB 8 billion with a sales rate of 90% achieved in most of the new projects and one project was 100% sold out.
HYDE Sukhumvit – 95% sold already.
“Key factors leading to the successful sales performance, despite the overall market slowdown, include the developers’ in-depth understanding of their target markets which led them to create and offer products that matched high-end buyers’ requirements. In today’s competitive market, developers creating a high-end or luxury product need to match customers’ requirements, especially in terms of unit size, layout, quality of specifications, and building architecture as well as decoration style. I believe there is still room for innovation in new product development,” added Ms. Pathnadabutr.
Luxury condominium projects scheduled for completion and transfer in 2014 that CBRE Thailand represents as marketing consultant and sole sales agent include HYDE Sukhumvit (95% sold) and MODE Sukhumvit 61 (100% sold out). Usually, the level of unit cancellation in the high-end segment is very low.
“Most luxury condominium projects require down payment as high as 30% resulting in a limited number of speculators. Some buyers may sell their units for capital gains while most of the buyers are either long-term investors or treat the units as assets for their children. High-quality projects are mostly situated in good locations and prices will not fall. For instance, a number of completed condominium developments located on the main Sukhumvit Road were sold at 20% higher than the launch prices,” said Ms. Pathnadabutr.
This year CBRE Thailand will launch around 6 new condominium projects for developers in the second half of 2014 with a total value of approximately THB 11 billion, including a resort condominium and villa project in Khao Yai located on Phansuek-Kudkla Road, a freehold condominium project on Langsuan Road, a luxury riverside condominium project, a luxury single house project in downtown Bangkok, and low-rise luxury condominium projects on Sukhumvit 55 and Nanglinchee Roads. Registration for these new projects will open in early June 2014.