Thailand Luxury Real Estate
Leading property management and services agency CBRE Thailand has announced that its focus for 2015 will continue to be on the luxury market, where it anticipates growth in residential demand for both sales and leasing.
In 2014, CBRE concluded 1, 644 residential transactions with a combined value of THB 14.35 billion, including sole agency projects and re-sale transactions in Bangkok, Pattaya, Hua Hin, Phuket and Khao Yai. The company believes the level of sales activity will continue well into 2015 and has secured nine new sole agency projects with a combined value of over THB 23 billion.
CBRE recently released its new forecast report for Thailand’s luxury property segment in 2015.
Demand, Supply & Pricing:
Although the luxury market will face intense competition due to new supply this year, a broad improvement in the Thai economy and the country’s political stability will be key supporting factors, combined with an improvement in the global economy, particularly in the US and Europe, says the report.
The majority of luxury residential demand will continue to come from high-net worth Thais. Factors that will continue to drive demand include changing social demographics with smaller household sizes and changing lifestyles where there is demand across all ages to live within the prime downtown areas.
To purchase at lower prices, buyers will have to consider remaining units in previously launched projects, low-rise developments, older buildings or projects in less prime locations. “It is also likely that re-sale prices of units in older buildings with good management in prime locations will increase substantially, ” says Ms. Pathnadabutr.
In late 2014, a number of projects, including The Sukhothai Residences, Marque Sukhumvit 39, and Magnolias Waterfront Residences at ICONSIAM, exceeded record breaking prices in excess of THB 300, 000 per sq.m., triple the highest prices achieved over 12 years ago.
“This is an opportunity as well as a challenge. Developers need to understand that the location must correspond with the right target market and their requirements. Not every location is suited for a luxury product, ” added Ms. Pathnadabutr.
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