Foreign Demand for Bangkok Condominiums Driven by Weak Baht
Demand from foreign investors to buy mid to upper-market condominiums in Bangkok's central business districts (CBDs) is strong, especially from Asian countries, thanks to the Asean Economic Community having come into effect at the beginning of the year, plus the baht's continued weakness.
Implementation of the AEC presents a positive challenge for Thailand's property developers to roadshow their residential projects overseas, especially in China, Taiwan, Singapore, Hong Kong and the Middle East.
"We plan to road-show our luxury condominium projects in Taiwan, Hong Kong and Singapore this year, having witnessed [foreign] demand to buy in these projects last year," said SC Asset Corp's chief executive officer, Nuttaphong Kunakornwong.
The company's luxury Saladaeng Ond project, which was launched last year, has already achieved sales of €23 million to foreign buyers from Hong Kong, Singapore, China and Taiwan, he said.
Up to 30% of the customer target for Saladaeng One, which offers units from €330,000 apiece - or €7,800 per square metre - is the foreign market, the CEO added.
Sansiri president Srettha Thavisin also said that condominium demand among foreigners wishing to buy had picked up strongly, especially for units priced above €130,000.
Last year, the company recorded €88 million in presales from foreign customers, and it expects overseas presales of up to €126 million from its overall presales target of just over €1 billion this year, a 47% increase on presales in 2015.
Most of the developer's foreign buyers are from Asian markets, such as Singapore, Japan, mainland China, Malaysia, Hong Kong and Taiwan, Srettha said, adding that it also hoped to see good sales from Europe and the United States.
"Although luxury condominiums in Bangkok's CBDs have high prices, they are still lower than for condominiums in many other Asian economies, especially Singapore, Hong Kong, and Taiwan," the president said.
The AEC's implementation this year and the baht's weakening from 33 per US dollar to between 35.50 and 36 are the main factors boosting foreign demand for condominiums in Bangkok's CBDs.
Frank Leung, managing director of Hong Kong-based Fulcrum Capital, which invested €58 million to buy 306 units of the Park 24 condominium from Proud Residences last year, said Thailand was the first Asean country in which the company was expanding its investment. The company sees business opportunity especially for residential projects, for which prices are still lower when compared with Asian markets like Hong Kong, Singapore and China.
Aliwasa Pattanthabutr, managing director of property agency CB Richard Ellis (Thailand), said demand from foreign investors to buy luxury residences in the Kingdom continued to be strong because Thai luxury condo prices were still lower than those in other Asian markets.
"Most foreign buyers looking to buy properties in the region have a fixed budget to spend. With the baht declining, they can buy more expensive properties. In Phuket, we have recently been able to sell more expensive units in projects we represent," she said.
