Are you looking to buy or rent a condominium in Bangkok? Well, you are in just the right place. There are tons of things you need to know about owning property in Thailand, let alone Bangkok, before making such a big decision. Did you know that Thailand has one of the biggest economies in Southeast Asia? Moreover, its capital city, Bangkok, one of the largest cities in the world, is the ever-pulsing heartbeat of development and investments in Thailand. Ranging from numerous skyscrapers and unique monuments, to wonderful Thai architecture, the city presents an attractive landscape for investors and real estate developers. The capital, in the opinion of several real estate market watchers, offers a lot of potentially lucrative investment opportunities.
Thousands of expats, tourists, and overseas investors think of purchasing houses, condos, or land in Bangkok every year.
Buying a condo is said to be one of the easiest means of entering into the Thai property market. New condominiums and buildings have been aggressively entering the Bangkok market, with prices going on the rise due to increased local and international demand. Interestingly enough, for mid to high-end downtown condos, the expatriate market is the main rental market. This is mainly because the number of expatriates keeps increasing by over 10%, year on year. The most popular among these are the two bedroom and three bedroom condos bought or rented out by expat families. It is now very easy for foreigners to buy into Bangkok’s condos, since they are protected by laws allowing them to own such property either in leasehold or freehold format.
Before you reach into your pockets and make a big commitment, here are a few things you need to know about the Bangkok condo market.
The Market Overview
The condominium market in Bangkok is seen to have continually grown despite all concerns over the expected spillover effects from the increasing household debt and Thai economic downturn. New launches constitute over 70% of the total land supply, since land cost and scarcity of land in the CBD are main hurdles for land developers.
Therefore, to boost sales of condos, several listed developers came up with campaigns for mortgage fees and transfer fees which were attractive incentives for buyers.
The luxury market has grown particularly well, with many new developments being planned and launched in the city, both along the transportation lines and upon the proposed lines that extend further out. Foreign buyers are being targeted more and more, as the purchasing power of Thai nationals lacks potential.
Condominium Locations and Classifications
Most condos are either located in the central business district, the city fringe area, or Bangkok’s peripheral area. The city area is popular with many tourists, expatriates, and “upper-class” citizens. The city area is preferred, due to its convenient access to several transportation and shopping areas.
These condos are mainly classified as Super Prime, Prime, grade A, and grade B condos. The Super Prime and Prime condos are mostly located in the CBD areas, are of impeccable standards, and range in price from around THB 200,000. The Grade A condos are found in the city’s fringe area, are houses of high standards, and start from a selling price of about THB 150,000. Grade B condos are located anywhere in Bangkok and are relatively affordable to most people.
Condominium Supply and Demand Trend
At the end of the second quarter of 2016, the supply of condos amounted to over 400,000 units, which was an increase of close to 6% from the previous year. There were several new launches including the Politan Rive, Lumpini Place Petchkasem, and the Lumpini Ville Ratchaphruek-Bangkok, which were all located on the peripheral sides of Bangkok. Such large condominium projects were going at a selling price ranging between THB 45,000 to THB 55,000 per square meter.
There are plans by developers to launch more projects in the upcoming years, due to recovered and increased consumer confidence resulting from the government’s incentives and mega infrastructure projects that have kicked off.
The highest concentration of new condos is said to be mushrooming in Bangkok’s northern areas around Rattanathibet and Chaengwattana.
Overall, the demand for condos has increased from about 78% in 2015 to 80.4 % in 2016. This was mainly due to a reduction of the units launched, resulting from stringent loan standards by most banks and a weakening of the purchasing power of buyers. To curb this, some property developers are looking into launching promotional campaigns to boost sales, including special interest rate offers and discounted purchase prices.
Sarah Marshall is an employee of Sense Property, a real estate agency in Bangkok, and has been helping expats with relocation and property investment since 2006.