Bangkok beckons: 2018 property overview

/ EdgeProp
January 4, 2019 7:00 AM SGT
The Bangkok residential market saw a higher concentration of new launches in 2H2018 than in 1H2018​(Credit: Bloomberg)
Public-listed Thai property developer Sansiri showcased four of its Bangkok projects in Singapore over the weekend of Nov 24 and 25. The projects were XT Ekkamai in Sukhumvit; XT Phayathai, located within a five-minute walk of the Phayathai BTS station; The Base Saphanmai, located a five-minute drive from the Don Mueang Airport; and The Line Wongsawang, just 200m from the Wongsawang train station.
According to Sansiri, pre-sales to foreign property buyers totalled THB12.56 billion ($526.4 million) as at Nov 5, which means it is close to achieving its target of THB13 billion for the full year. The firm is projecting a 40% increase in international property sales from last year.
The Bangkok residential market saw a higher concentration of launches in 2H2018 than in 1H2018, according to James Pitchon, executive director of research and consulting at CBRE Thailand. Most of these launches in the latter part of the year were located on extensions of the mass transit line, he notes. The average price of new condos launched as at 3Q2018 was THB137,933 psm, up 26.4% y-o-y, says CBRE.
Foreign interest in Bangkok’s residential launches has come mainly from Chinese buyers, notes Pitchon. “Some developers have become very reliant on sales to foreigners and have, in some cases, reached the 49% limit, which was very rare in the past.”
Bangkok is also a popular destination for Singaporean investors. Based on CBRE data, Singapore buyers made up the ninth-largest group of foreign purchasers in Bangkok.
Next year, emerging markets such as Bangkok, Cambodia and Ho Chi Minh City are expected to continue to attract Singaporean investors looking for alternative markets, says Doris Tan, regional director of Strawberry Star property group.
Sales to Chinese purchasers and other foreigners are expected to slow in 2019, though, says CBRE Thailand. “In some cases, foreign purchasers have been promised unrealistic returns such as 7% to 8% yields and price increases of 10% a year,” says Pitchon. “In many cases, these returns are unlikely to be achieved and overseas sentiment towards Thai property could change.”
There are no property cooling measures to deter foreign buyers in Thailand....