Luxury Thai Properties Surge in Popularity Due to Pent-Up Demand
Resort properties experience a recurring surge in popularity. Due to pent-up demand for Thai properties in the luxury or upscale sectors, resort condo units and villas were getting sold one by one, reports CBRE.
In the past few years, developers concentrated on launching residential projects in Bangkok’s central business district. Research conducted by the international property consultant reveals that approximately 30,000 new units were launched between 2016 and 2018, mostly condo projects.
Challenges in the Thai Property Market
The housing market has always dealt with rising land prices and investment costs. These, in turn, have resulted in higher asking prices.
In CBRE’s research, 70 per cent of luxury property buyers happens to be Thais. Their main reasons for purchase: personal use and long-term investment. This means that most locals are not keen on short-term investments. 40 per cent of residential property buyers, on one hand, are foreigners who spend at least 10 million baht.
Why luxury and ultra-luxury resort properties in Chiang Mai, Hua Hin, Khao Yai, Pattaya and Phuket, have decreased has something to do with the shift in developers’ focus. Because several residential developers focused on launching Bangkok-based projects, the other markets were subsequently neglected. This triggered a pent-up demand as only a limited number of projects were launched.
Just this year, CBRE also discovered a rising demand for more resort properties at prime destinations. Buyers who express interest in purchasing resort properties in places outside of Bangkok are more than ready. They are the type of buyers who purchase for both personal and long-term investment purposes.
A Boon to the Upscale Sectors
CBRE notes: “Although prices are higher, if projects are on the beachfront or with ocean views, with five-star hotel management, or with attractive rental guarantees, buyer response and sales performance have been positive for luxury and super-luxury projects launched in 2019.”
Examples of positive sales performance include:
(1) Residences at Club Med Krabi (185,000 baht – average price per square metre)
(2) Residences at Sheraton Phuket Grand Bay (230,000 baht – average price per square metre)
A three-day showcase in Bangkok dream an incredible 300 million baht sales for both projects.
CBRE Thailand’s head of resort property sales, Prakaipeth Meechoosarn, said that Club Med Krabi and Sheraton Phuket Grand Bay now have an updated sales rates of 85 per cent and 65 per cent, respectively.
Veyla Natai Residences on Natai beach, Phangnga, also launched in 2019, boasts luxurious pool villas which cost between 67 million and 98 million baht. It already sold 50 per cent of its units in a matter of weeks without any showcase events.
Priced at 150,000 to 180,000 baht per square metre, MGallery Residences MontAzure Lakeside and Twinpalms Residences MontAzure, are two more recipients of this pent-up demand for luxury coastal properties. Both earned an impressive sales record of 300 million baht within 4 days since its August launching in Bangkok. Twinpalms, in particular, reached a phenomenal 80 per cent sales rate.
If these sales records were any indicator, there is indeed a rising demand for resort properties. Those situated in prime locations are especially touted to generate higher ROI. CBRE predicts that their value may appreciate in the future.
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Source: Bangkok Post