Bangkok--8 Dec--Agate Communication
Throughout 2015 residential property development trend in super-luxury segment has been very popular and eye-catching market. Small and large developers have been interested in developing product in this market. Although overall property market and economic have been slowing down, it has less impact on this segment. Land cost is one of the factors that drive property developers to shift their portfolio to this product segment. The products comprise 2 main categories including single detached house and condominium. This market research covers unit prices of over 15 million baht for condominium and over 30 million baht for single detached house in inner and outer Bangkok.
Since 2011 the newly launched super-luxury residential segment has totaled 4,045 units comprising 1,263 units of outer city house, 129 units of inner city house and 2,653 condominium units. In 2015, there were a total of 21 projects newly launched luxury residential and 9 of them were condominium which reached a record high.
To analyze size of luxury residential property, outer and inner city house sizes are ranging between 350 - 780 square meters. The difference is size of land plot which ranges between 100 - 400 square wah for outer city house and 24 - 120 square wah for inner city house. When compared with condominium sizes of two bedrooms or more in the similar product range, usable area of condominium is around 70 - 120 square meter for two-bedroom unit, 130 - 220 square meter for three-bedroom unit and four-bedroom type and penthouse is around 270 - 700 square meter. However, the larger usable area a unit has, the more distinctive functions will be, depending on lifestyle analysis and buyer's taste. Product development was analyzed to meet the requirements of this target buyer.
"Players in the market can be categorized into 2 main groups; large developers focusing on large projects in both condominium and housing segment which have been in this market for a long time and medium-sized developers focusing on niche product development. They do an analysis on upper-end customer's needs and develop a small-or medium-sized project. There are many new developers entering into this market as they believe there is demand in this segment. It is not difficult to market the product and the product is sold to a fewer buyers," Mrs. Nalinrat Chareonsuphong, Managing Director of Nexus Property Marketing Company Limited says.
Demand
Sold rate of house and condominium in this segment which has been launched since 2011 is 53%. Sold rate of outer city luxury housing project stand at 43%, inner city house at 60% and condominium at 57%. Majority of remaining supply is from projects launched this year.
Buyers in this market segment prefer to see a real product, particularly outer city house which is mostly pre-built unit. Main factor driving this product segment's growth is the expansion of new family in various residential node of Bangkok. For inner city house and condominium, it is the increasing price which opens for investment opportunity. Moreover, foreigner market is another group interested in luxury house and condo.
Pricing Range
Price range in super-luxury segment has increased consecutively, driven by product which becoming more luxury together with the increase in land and construction costs. However, price setting for this product segment depends largely on luxury of the project, details, materials and equipment provided in the project. One of the most expensive house available for sales now is Q Twelve, by Q House located on Rachapruk Road which offering more than 100 million Bt.
For super-luxury condominium with unit prices starting over 15 million baht, there are a total of 9 projects newly launched this year with average price of 288,000 baht per square meter, rising 18% from last year.
Trend
"Next year, this market will continue to grow significantly. There will be new projects at the price ranges of higher than 30 million baht with new design concept coming in this market. More than 10 projects have planned to launch next year from both large and small developers. Price tends to be higher for new housing styles with different designs and functions that meet customer's requirements. These projects will be in inner city in a peaceful area, yet close to luxury lifestyle venues which is a suitable location for this product development," Mrs. Nalinrat added.
Foreigner market will continue to be strong as property prices in Bangkok remain relatively lower when compared with more matured overseas market. Main locations for this group is looking for remain in Sukhumvit, Lang Suan and Sathorn as they are popular and foreigners are very familiar with.
Besides Sukhumvit and Lang Suan, attractive locations next year for high-priced inner city house will include lower Phahon Yothin and Soi Ari as vacant land plots become very rare and land costs remain lower than those in Sukhumvit area.
Prices of outer city house tend to rise, being driven mainly by cost-push factors. The situation for inner city house will be similar while prices of new condominium will increase at least 10% next year.