Bangkok's luxury condominium market's investor demand has partially recovered, according to a JLL report. The majority of the net absorption came from investors purchasing buy-to-let properties.
Whilst demand from high-net worth individuals had increased at the end of last year as a result of significant discounts, it decreased in the quarter. Unsold market inventory decreased to 4.8%, accounting for 3,348 unsold units.
Demand for rental apartments has decreased as a result of a lack of new tenants and tightening budgets. A large number of former residents remain in their hometowns/home countries and have not yet returned to Bangkok following the easing of pandemic restrictions. Even though there were new expats who filled those vacant roles, the company budget may be reduced due to the lower staff levels.
In Bangkok's luxury condominium market, new supply was scarce in 1Q22: 125 Sathorn (756 units) was the sole new launch in the quarter. Due to the uncertainty regarding the pandemic, paused projects remained inactive. Furthermore, no new apartments were added for two consecutive quarters.
The condominium stock climbed marginally to 69,541 units, as a result of the recent completions of Four Seasons Private Residences Bangkok (355 units) and The Strand Thonglor (198 units). While there were 4,654 apartment units available (slightly changed due to Antique Palace being redesigned).
The completion of top tier products rose the capital value of condominiums by 2.4% in 1Q22, to THB 130,204 per sqm. Furthermore, many developers boosted their pricing points following Thailand's reopening in the previous quarter.
The rental market has maintained a wait-and-see situation in anticipation of significant improvement. The owner of buy-to-let units were compelled to provide big discounts in order to maintain occupancy. Additionally, the new property tax was completely implemented in Thailand, resulting in a modest decrease in condominium net effective rent of 2.6% q-o-q, to THB 466 per sqm per month.
Towards the end-2022, we anticipate many new launches in the luxury market, including conventional condominiums, branded residences and the relaunch of previously on-hold projects. However, the pandemic and the Russian-Ukrainian war are significant concerns that could affect both the overall economy and the residential market.
Source: Real estate asia
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