Buyers urged to chase value

Published: 23 Nov 2017 | WRITER: Post Reporters

[Bangkok Post] Buyers seeking a condominium unit in locations near the Rama IX-Ratchadaphisek intersection are advised to consider a resale unit or nearby locations, as prices of new units in these locations are rising by 10% a year.

Surachet Kongcheep, director of the research department at property consultant Colliers International Thailand, said either investment buyers or real demand interested in the condominium in this location should do extensive research before making a decision.

"Despite interesting positive factors in this location, if you buy a unit at the project where unit prices are higher than others or the market average, it may take more time to resell the unit," he said.

Mr Surachet suggests condo buyers explore the numerous projects in the location, as some offer units at lower prices than at newly launched projects.

In particular, buyers can visit a real unit, see the location and view facilities at completed projects that usually have lower prices than new ones.

"There are many choices in other locations away from this location, for example, those near other subway stations or on sois off Ratchadaphisek Road where unit prices are more affordable," Mr Surachet said. "Locations along Rama IX Road are also interesting."

He said locations near the Rama IX-Ratchadaphisek intersection have been hotspots in the past two years, with new condominium supply launching continuously each year. The newly-launched projects came with higher unit prices.

The location got a positive boost from the development of large private property projects over the past four years, including a mega shopping mall, four new office towers and the launch of what will be the country's highest tower.

These projects stimulated demand and interest in the location, generating condo supply of nearly 9,000 units as of 2017, with more than 2,500 units being launched next year.

Mr Surachet said before 2011, the number of new condo supply launched in this area was very minimal. From 2012 onwards, the supply has been rising every year, with a cumulative 6,700 units to have been launched by the end of this year.

The number of new condominium supply launched in the Rama IX-Ratchadaphisek area this year hit a record high at 2,848 units, up from 473 units launched last year. The last peak was in 2007 with 1,995 units.

The sales rate was healthy at around 86% but average prices soared to 121,000 baht per square metre, rising over 70% from 2011. The highest price is more than 170,000 baht per sq m.

Vittakarn Chandavimol, the chief business group for condominiums at SET-listed developer AP Thailand Plc said demand for the condos on the linkage area of Asok-Phetchaburi-Rama IX has been rising constantly.

"Demand was from people working for Thai and multinational firms, which relocated to six Grade A office towers in the new central business district," he said.

Mr Vittakarn envisions 78,837 people working in this area by 2020, while condominium supply available for sales totalled only 1,198 units or 17% of total supply newly launched.

According to AP's market study of projects in nearby locations, occupancy was about 85% at The Address Asoke, Rhythm Asoke and Aspire Rama IX.

Of the total residents, one fourth were tenants. Most of them were Asian, from Taiwan, Hong Kong, China, Singapore and Japan. Rental rates were between 22,000-53,000 baht per month with a yield of 7-8% per year.