While broad development numbers in Bangkok this year remain challenging, the reality on the ground is that well located condominiums in the major CBD areas continue to see a groundswell of success.
Be if offerings in Lang Suan, Thonglor, greater Sukhumvit or on the river, when the location is right, the sales pace takes on the appearance of greased lightening.
Though when overseas buyers approach me for friendly advice I increasingly go into question mode before offering up an opinion, as what I’ve learned is there is no easy response to someone looking to buy a condo in Bangkok.
Sure, I can recite the hymnal of location, developers reputation, buying early off plan to get the best unit selection and pricing or go check out the location and is the project’s claim to be an easy walk to the BTS or MRT on a rainy day? And there are many rainy days in Bangkok.
Within the past five years property prices in the city have continued to click up to levels that a decade ago seemed unimaginable. Condo buildings have continued to grow higher, the sois are rapidly become more urbanized and with land pricing escalating, units are now more expensive and developers have kept making them smaller in order to appeal to the broadest demographic possible.
I always ask potential buyers what are there longer term plans? For those who don’t just want to flip units and need larger livable areas, the answer is to often look at the secondary markets in older builders where prices are rational and the units were designed for larger living in a different day and age.
Of course, the reality is that the overriding driver of the Thai demand is for new units so the question comes up that eventually will the capital appreciation in the secondary market make this attractive to Thai buyers in the future.
My best analogy is to look at automobiles and understand in Thailand Mercedes. BMW and even Honda tend to hold greater value than the entire onslaught of car brands and options out there, so it’s good to keep in mind who the future buyer could be, if you decide to sell and what motivates them? Tap into Thai consumer culture mode.
Confusion enters the market though when dealing with the massive incoming supply of smallish entry -level condos I call the Mickey Mouse flats. They range in the 20-30 square meter market and the supply side is inundated with them.
These are essentially starter homes for younger working singles and the question has to be asked, what will the secondary market be once the glitter of newness wears off? As the core base of owners start to get married and move to larger residences is there an entire market of similar Millennials out there to continue the momentum? How deep are the replacement players?
In conclusion, there is much more here at play then supply and demand or even the location, location, location tagline. A lot has to be to develop insight into the secondary consumer of the future and also look at your own criteria is living in a larger flat and possible taking lower capital gains in the future an option?