Super-prime condo market to keep growing but amid slower sales: Knight Frank
The Bangkok market for super-prime condominiums will continue to grow this year but at a much slower pace of sales, Knight Frank Thailand says.
The company’s executive director and head of residential, Frank Khan, said 2016 was another outstanding year for Bangkok’s prime and super-prime condominium market, with strong demand and high price growth despite the spillover effect from the slowing Thai economy.
On the supply side, developers with land banks in prime areas found the segment to be more suitable for development, which could generate relatively higher-than-average returns on plots with higher land-acquisition costs.
On the demand side, buyers in this segment were mostly affluent individuals who do not rely on home loans. Moreover, there is a lot of demand from Hong Kong buyers in this segment, he said.
This year, six Bangkok condominium projects have been added to Knight Frank’s Bangkok prime and super-prime condominium lists.
Prime Sukhumvit retained the largest share of the market in terms of supply, with 597 units entering the market – 236 of which belonged to the super-prime market. These units are from Khun by Yoo on Sukhumvit 55 (Thong Lo) and Vittorio on Sukhumvit 39 (Phrom Pong).
Central Lumpini, on the other hand, saw 513 new units entering the market from two super-prime projects: 98 Wireless on Wireless Road and 28 Chidlom on Chidlom Road.
None of the new projects from the Sathorn and Riverside areas qualified as either a prime or super-prime project this year.
The prime and super-prime condominiums remained the most resilient sector of the Thai property market, with strong demand and price growth when compared with the overall Bangkok and Phuket markets.
For the prime segment, the accumulated sold-rate at the end of the year stood at 75.4 per cent, with 382 units sold. For the super-prime, the accumulated sold-rate fell for the second year in a row to 53.6 per cent from 59.3 per cent at the end of year, despite a very high number of first-hand transactions (284 units sold this year).
Mostly responsible for the decline in the sold-rate were two projects that were not able to commence a full project launch and promotional campaign after the national mourning period from the passing of His Majesty King Rama IX – these include 28 Chidlom (with 436 units) and Vittorio (with 88 units).
If Knight Frank were to base the sold-rate without these two projects, the accumulated sold-rate for 2016 would have been 66 per cent.
