CBRE Reveals Strong Demand for Bangkok Luxury Condominiums and Increased New Housing Project Launches

Real Estate News Monday October 11, 2021 17:02 —PRESS RELEASE LOCAL

CBRE Reveals Strong Demand for Bangkok Luxury Condominiums  and Increased New Housing Project Launches

CBRE, a leading international property consultant, revealed that super-luxury condominium projects in Bangkok led the highest average booking in the first half of 2021 with 76.3% and that the market remains attractive for investors while new launches from Bangkok's housing projects have increased by 26.8% Y-o-Y due to strong end-user demand for spacious living.

Ms. Artitaya Kasemlawan, Head of Residential Sales - Project, CBRE Thailand commented, "Due to the current pandemic, the overall Bangkok residential market in the first half of 2021 was affected by the emergence of COVID-19 waves. This resulted in a drop in the supply volume of new condominium launches which have slowed since 2020. CBRE's figures in Q2 2021 showed an 11.4% decrease in new condominium project launches compared to Q1 2021, with developers concentrating on special offers, mostly giving 5% - 10% discounts, for unsold ready-to-move-in inventory to quicken customers' decision making."

Statistics from CBRE Research shows that in Q2 2021, the total Bangkok condominium supply stood at 828,549 units, of which 106,990 units are still under construction. There were 7,983 new units of condominiums that have been completed, with only 1,444 units in the central business district (CBD) area. Currently, the average sales for completed condominium projects is at 90.9% while the average booking of condominiums under construction is at 61.4%, with super-luxury condominiums leading the highest average booking at 76.3%.

Despite the fact that the overall Bangkok condominium market is not as active as the pre-COVID-19 years, super-luxury condominiums remain an attractive option for high-end investors with high purchasing power, especially the units located in rare locations as well as the branded residences managed by world-renowned hotel brands.

"Prime location is still the most important factor in attracting buyers and investors, not excluding the offering of high standard services by leading hotel brands which will reflect in long-term capital value appreciation of the projects. This is an excellent time for buyers to own a worthwhile asset which can be passed on to future generations at a reasonable price," added Ms. Artitaya.

In terms of low-rise housing projects or single houses with land plots in Bangkok, CBRE has witnessed a continued increase in demand from 2020, due to the changes in consumer behavior as the consumers' need to spend more time at home has increased along with the need for spacious yet proportionated areas for privacy and additional areas for workspace or convertible space for various family activities are put into perspective.

The total supply for housing projects built by developers within 10 years is 337,188 units while 225,423 units are self-built by end-users. CBRE Research reports an increase in new launches for low-rise housing projects in Q2 2021 by 26.8% Y-o-Y and a total of 22,141 units or a 5.2% Y-o-Y increase in house transfers.

CBRE's total sales in the first half of 2021 showed a 120% increase in luxury housing project sales and a 59% increase in luxury condominium project sales. While clients' visitation to the projects have decreased by 23%, the number of units sold has increased by 18.8%. The overall luxury housing and condominium project sales have increased by 38% compared to the first half of 2020 with the highest sales value for a super luxury penthouse at THB 130 million and for a super luxury house at THB 100 million. Only 1.1% booking cancellations from clients were found from the total units sold, and foreign investors accounted for 5.3% in the first half of this year.

"Unlike the condominium market that has a higher share of the investor market, the housing market is primarily driven by demand from end-users which makes it less affected by the COVID-19 situation. Recently, there has been a developing trend in the housing market as developers become more in tune with the concept of better living and wellbeing. This health-focused trend is not limited to the project design, but extended to material selection, innovative technology, and the juristic services for the residents' wellbeing as well. These are the elements which will answer the need of modern-day consumers," Ms. Artitaya concluded.

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