Bangkok’s ultra-luxury real estate market has again been placed in the media spotlight, this time by Bloomberg who cite a “foreign buying binge is fueling” the red-hot sector.
In today’s news article, it compares prices at Sansiri’s high profile 98 Wireless development with those in Hong Kong, where one buyers compared the opulent two-bedroom, three-bathroom property in central Bangkok with a cramped studio flat in Hong Kong.
Bloomberg reported that: “Scenes like this have become more common in the Thai capital, where foreign money is pushing up prices at the top of the real estate market, even as developers struggle to sell more pedestrian properties.”
Whilst foreign buyers are becoming increasingly important to Thailand’s property market, we believe it’s not fair to say, at least yet, that foreign money is pushing prices skyward.
That said, Bloomberg added that developers are having problems selling to locals.
Ratchaphum Jongpakdee, General Manager for Thailand at real estate firm Colliers International, added that developers have no problem selling to foreigners.
The media firm said, citing real estate firm CBRE which is known to only use its own internal project data, land prices in the centre of Bangkok rose by a record 30 percent, with foreign investors making up almost a quarter of the capital’s high-end property sales.
Earlier this year, Thailand’s Agency for Real Estate Affairs suggested that foreign buyers were responsible for one in four of all property purchases in Thailand, a claim that was widely dismissed by some so-called experts.
Looking at foreign sales data obtained by Bloomberg for its article, it reported Sansiri sold half of its 77 units at Wireless 98 before completion.
At nearby Magnolias Ratchadamri Boulevard, Bloomberg reported that 80 percent of units have sold, with investors from Hong Kong, Singapore and Taiwan accounting for more than half of transactions.
At the Four Seasons Private Residences (pictured), it discovered that 70 percent of the 355 units have already been purchased, with half being foreign buyers.
This report would suggest that Thailand is possibly overly reliant on foreign property investments at the moment, but whether it can be accused of increasing prices at the high end of the market is a bold claim.
Thailand needs to understand what will happen, one day, when that tap runs dry and foreign money finds another place to call home.