Significant Q1 Growth in the Bangkok Condo Market
- Apr 21, 2010
Bangkok, THAILAND–The Bangkok condominium market experienced a significant turnaround in property values this past quarter with a recent market report showing a 380 percent growth from 2008 to 2009. The condominium presales figure jumped from 3.97 billion THB ($123.3 million) to 15.1 billion THB ($468.8 million).
The market report issued by Raimon Land, a luxury property developer, outlined the purchase increase in the Thai real estate market and overall economic conditions in Bangkok. The nation is experiencing optimistic economic growth in many sectors, including a 5.8 percent GDP growth in the fourth quarter. The condominium market is not fully recovered from the financial crisis, but improving market conditions indicate confidence in sustained growth.
Though the growth figures look positive for Thailand, certain aspects such as the political climate could cause significant economic instability. These political riots add to consumer doubts about the condition of the economy, thus causing a decrease for real estate valuations. In addition, foreign investors might be less likely to purchase property during a politically unstable period.
Nevertheless, the Thai economy continues to perform above expectations.
Domestic buyers represented over 90 percent of the condominium sales in the fourth quarter of 2009. Analysts believe that these strong domestic investments contribute largely to the real estate growth in Bangkok. Vice President for Research and Development, Simon Dervillé, from Raimon Land says that Bangkok is poised to sustain increasingly positive economic conditions.
“One of the key findings of our research is that demand from Thai buyers has been remarkably strong with many developers now turning their attention to this target group,” says Dervillé.
According to the report, lower construction and material costs alongside a selection of reasonably priced, quality land has given developers a large advantage in the last year. The construction material price index (CMPI) dropped 24 percent from its July 2008 peak. Yet not all signs are positive, as banks still remain cautious in lending for condominium projects.
The report, Condominium Focus Bangkok Update, is an independently researched publication on the city’s condominium market. The report aims to provide insight into development, supply, sales, and transfers.