Contrary to its own very recent research, one prominent real estate firm has suggested that prime and super-prime Bangkok condo prices are expected to grow during 2018. That research revealed significant price contraction at the top end of the sector during the first three months of the year.
This latest news comes after the firm announced new price records for the sectors in 2017.
In Q1, data from Knight Frank showed that prices in the sector had declined while prices of condos in Bangkok’s suburbs had shown the biggest increase in prices.
As at December 31, Knight Frank noted that the accumulated prime and super-prime condo stock in Bangkok was 21,330 units, representing a strong increase of approximately 51 percent year-on-year.
This substantial increase can be attributed to the large number of property developers who were shifting their attentions to the top end of the condo market.
Many of those same developers are now shifting their attentions to the suburban areas of the city.
In line with land scarcity and rising land prices, super-prime condominium projects achieved record breaking average selling prices of THB 366,745 per sqm during 2017, while the average selling prices for prime condominiums also set a new high at THB 238,515 per sqm.
Whilst the real estate firm said that the top end of Bangkok’s condominium market is expected to grow continuously, ThailandProperty.News would suggest that saturation levels in this sector have been reached, or at the very least are close to being reached.
How many people can truly afford to buy property at THB 366,000 per sqm?
Despite this, Knight Frank said the growth of already-booming neighbourhoods. like Sukhumvit and Central Lumpini, will continue unabated.
Demand is likely to strengthen since the luxury supply is still very limited and will continue to be driven primarily by wealthy Thai buyers.
Nevertheless, the expectation is to see a larger portion of international buyers in the market, particularly the affluent purchasers from Mainland China, Hong Kong, and Taiwan.
Knight Frank predicted that average selling prices are predicted to continue to rise in line with land scarcity in prime areas, and higher land prices will leave developers with little choice but to deliver high-margin units to their cover costs.
To keep up with wealthy buyers’ lifestyles, some new luxury developments will need to come up with bespoke amenities, such as a manicure room, spa and massage room, hydro spa pool, and private dining room with private chef service from a five-star hotel, Knight Frank concluded.