In recent years, condominiums have become the highlight of the Bangkok property scene. The cost of commuting and rapidly changing lifestyles of Thais are the driving forces behind the boom, especially in the downtown condominium market.
Condominiums are attractive to not only the young, but are in high demand among the elderly as they choose them over big houses. The availability of a wide range of options in the condo market in Bangkok, in terms of unit sizes and grades, has also made the segment more attractive.
Even though the prices of condominiums have gone up substantially in recent years, investors in the region still consider Bangkok luxury condominiums good value for money.
To take a comparative view, a super-luxury three-bedroom unit in the new Royce Private Residence Sukhumvit, covering 255 square metres, costs between Bt38 million and Bt40 million, while a similarsized unit in Dynasty Court in the mid-levels of Hong Kong costs about Bt250 million.
Meanwhile, a four-bedroom unit at Ritz Carlton Residences in Singapore, covering 284sqm, costs a whopping Bt360 million.
Bangkok offers better value over Ho Chi Minh City.
A 193- sqm home at the Millennium Residence in Bangkok’s Sukhumvit area, a high- rise with panoramic lake views, costs between Bt23 million and Bt25 million, compared to the about Bt32 million that a three- bedroom unit covering 163sqm in District 1 of the Vietnamese capital costs.
Investors with a budget of between Bt13 million and Bt15 million can buy a brand- new luxury two-bedroom condominium covering about 100sqm at the Athenee Residence on Wireless Road or The Met in Sathorn.
In Hong Kong and Singapore, the same amount of money would fetch just a 32-sqm studio.
In Bangkok, older properties are still cheaper and the coverage area larger.
For example, a 260-sqm, threebedroom unit at President Park costs Bt15 million, while a 366-sqm, fourbedroom unit at the Habitat Sukhumvit costs just Bt21 million.
Prices in Bangkok are about the same as in Beijing and Shanghai. Only Jakarta, Manila and Guangzhou offer lower prices.
Many investors may ask whether property prices in Bangkok will match those in Singapore or Hong Kong.
Prices in Bangkok, in most cases, have been driven by an increase in land prices and construction costs.
Bangkok is one of the few cities in Asia where the construction cost per square metre of saleable area is higher than the land cost element.
In the past, the land cost constituted less than 15 per cent of the total development cost.
However, with significant increases in land prices, especially in the city centre, the land cost has now gone up to about 22 per cent to 25 per cent of the overall cost.
In Singapore or Hong Kong, the land-cost element can exceed 60 per cent.
We have seen similar trends in prime residential areas of Bangkok, where there is a large price differential compared to the sutuation in non-prime locations.
Prices of condominiums in prime downtown locations of the city are likely to increase further, but will never catch up with those in Hong Kong and Singapore where there is a severe limitation on prime land for development.
This controls the supply and makes the market more stable for investors ensuring lower volatility in prices.
Also, the regulations over foreign exchange and ownership in these cities are more flexible and more investor-friendly than in Thailand.
Other related issues, such as taxation on investment and capital gains, are also clearly defined.
However, Bangkok remains a location that offers a wider range of high- quality properties in prime locations, at affordable prices for international investors.
Bangkok’s lifestyle is also more attractive, given the city’s superior healthcare, communications, shopping and transportation facilities.
With the existing selection of attractive projects, an investment in a Bangkok condominium is likely to generate good returns over the short and long term.
ALIWASSA PATHNADABUTR (Bangkok Post)
