Luxury condo demand still strong despite overall market sluggishness

As the price of land lots in downtown Bangkok has been increasing year by year, the company is convinced that investors are still looking for an opportunity to invest their money in high-end properties in the city, said Magnolia’s assistant vice president for marketing and sales projects, Peachpattha Pakakan.
Entering the second quarter, sales obviously improved as the company saw buyers take shorter cooling-off periods in buying luxurious residences, she said.
Therefore, more developers were prepared to launch new projects in the latter half of the year, and this is a new challenge for project owners in responding to customers’ needs to gain more share in the high-end property market, she added.
At present, Magnolia has three luxury projects under construction. The first is the mixed-use Magnolias Ratchadamri Boulevard, which offers luxurious residential units conjoined to the Waldorf Astoria Bangkok, a prestigious hotel in the Hilton chain located on the lower levels of the building.
Magnolias Ratchadamri Boulevard has reached 80-per-cent sales completion with prices at Bt230,000-Bt270,000 per square metre, and the expectation is to reach sales of 90 per cent by the end of this year.
The residences will be ready for transferring of ownership to clients very soon, Peachpattha said.
The second project is Magnolias Waterfront Residences at ICONSIAM, with a price of Bt250,000 per square metre and for which sales are already closed.
The third is The Residences at Mandarin Oriental, Bangkok. The property has a price of Bt350,000 per square metre, and now has reached more than 40 per cent of its overall sales potential.
According to a survey by Knight Frank Thailand, the prices of prime and super-prime condominium units in Bangkok increased by more than 5 per cent in the first half of the year, suggesting that those segments are far from being oversupplied.
The property consultancy’s research showed that for super-prime units – for which prices are Bt300,000 per square metre and above – the average price jumped from Bt303,250 per square metre at the end of 2015 to Bt319,095 at the end of June, an increase of 5.23 per cent.
In the same period, the average price of prime condos increased 7 per cent, from Bt226,350 per square metre to Bt242,313.
Despite the slow economic recovery, which has dented purchasing power, the market still expanded, assisted by foreign purchases.
“We are observing more interest from foreign buyers in super-prime and prime condominiums in Bangkok. Two years ago, the proportion of foreign buyers was averaging around 5 to 10 per cent; now we believe the number is around 10 to 15 per cent,” said Risinee Sarikaputra, research director of Knight Frank Thailand.
Most buyers of super-prime condos are Thais who buy a unit as a second home that serves their exclusive lifestyle, according to the company.
The foreign buyers of these units are mostly people from Hong Kong, Singapore or Taiwan who have businesses in Thailand.