Bangkok is a Buyer’s Market: Condo Investors Should Pay Attention!

Bangkok’s Real Estate market has been incredibly subdued and quiet over the past year!

Attentive observers would have definitely noticed that this year, the Capital is not blanketed by real estate ads such as roadside billboards and full spread ads in newspapers touting new project launches and real estate offers.

According to a recent report by international real estate consultancy Knight Frank, the supply of new condo units in Q4 of 2020 dropped by 77.8% compared to 2019. This same report highlighted that in Q4 2020, prices in the Central Business District fell 5% to Bt251,435 from Bt265,000 per square meter.

 

 

This lull in market activity is obviously no surprise, the COVID-19 pandemic slammed the property industry, disrupting both local Thai demand and crippling demand from international buyers. That fact is an awkward “untold truth”, especially for an industry that thrives on positivity and the promises of a bright future.

Bangkok’s real estate is in the much dreaded “buyer’s market” territory and this makes the industry deeply uncomfortable…

Real Estate Investors Should Pay Attention!

Just before the pandemic hit in Q1 2020, Bangkok’s real estate market had experienced over 5 years of uninterrupted growth and optimism. While this was incredibly good for developers and to a certain extent great for real estate agents, retail condo investors were caught in the momentum of ever-increasing prices.

This upward spiral had the effect of continually decreasing rental yields and gradually decreasing occupancy rates, as new condo supply was constantly hitting the market.

This had the negative effect of entrenching the earliest condo investors who refused to sell without a premium and penalizing newer entrants that were being caught at the tail end of the boom.

The pandemic was the unexpected catalyst that has completely inverted this trend!

Suddenly condos, especially on the secondary market but also in newly launched projects (As a result of developer discounts) are starting to look more appealing and rental yields are starting to creep back-up.

This upward trend is likely to continue, as the capital’s leading developers are putting a hold on their downtown condominium projects; in effect constraining new supply in the mid-term. For the first time in a long time, the market has corrected and is offering an investment opportunity to “buy low”.

While Bangkok’s real estate market is still facing uncertainty, those that still have the proverbial “dry powder” are faced with a window of opportunity to get access to very attractive real estate deals!

The secondary market is offering very interesting investment opportunities!

Here are 2 examples of the types of real estate deals available at the moment:

The Base Park West 77
2 Bed/ 1 Bath/ 48.6 Sqm @ Only 4.99 MTHB

 

 

This 2-bed condo in The Base Park West 77 by the famous developer Sansiri is a gorgeous corner unit offering 48.6 square meters of living space. The property offers a bright, airy and fresh living environment with stunning unobstructed open views of Bangkok.

The condo is located in the T77 Community in the up-and-coming On Nut neighborhood. On Nut is a vibrant area popular with both Expat and Thai residents. Its popularity and appeal is the result of the area’s convenience; with supermarkets (Tesco Lotus, Big C), shopping malls (Century Movie Plaza and Habito Mall) and a large selection of eateries and coffee shops catering to local residents.

 

 

The seller of this property is based overseas and she is finding the property difficult to manage. Similar unit types in The Base Park West 77 are usually marketed at 5.5-6 MTHB, this unit is therefore offered a steep 20% discount to current market prices.

Properties similar to this unit usually rent for an estimated Bt23-26,000 per month, meaning rental investors would immediately benefit from 5.5-6.2% Gross Rental Yield!

Prime Mansion Sukhumvit 31
2 Bed/ 3 Bath/ 156.82 Sqm @ Only 13.7 MTHB

 

 

Large family-sized 2-bed condo in Prime Mansion Sukhumvit 31, the property offers a comfortable and spacious layout. The project is well-maintained and offers a peaceful living environment, with a full range of facilities available to residents.

The property’s biggest selling point is its enviable location nestled in the heart of the desirable Phrom Phong area. The Phrom Phong neighborhood is famous for its trendy lifestyle with numerous malls such as Emquartier, Emporium and K-Village. The area offers a laid back and pleasant community environment popular with Bangkok’s affluent.

 

 

The seller has owned the condo for many years and is keen to let it go. According to established property portal Hipflat the average price in Prime Mansion Sukhumvit 31 is Bt142,000 per square meters, meaning that this condo is offered at an estimated 35% Discount to market price!

Investment Window of Opportunity?

 

 

This article may be construed as the ramblings of a real estate agency, looking for a “positive spin story”… We won’t try to argue against this fact.

Indeed, we are a real estate agency and we are trying to positively highlight the investment opportunities available!

However, even the most skeptical observer will have to agree that Bangkok’s real estate prices have corrected and are now much cheaper than back in 2018-19.

While Bangkok is suffering from the fallout of the pandemic, the city remains an attractive destination to live and work; in our view, the fundamentals of Bangkok’s residential appeal remain unchanged.

With a 3rd wave of C19 raging in Thailand, no one knows how long the adverse market conditions will continue. On a brighter note, with a nationwide vaccination program currently underway and the tentative reopening of the Kingdom to foreign travelers, Fresh Property is confident that the real estate market will start to regain steam in Q1/ Q2 of 2022!

 

Fresh Property is an established Real Estate Agency we offer a large selection of condos, houses and apartments in Central Bangkok.

Feel free to browse through our collection of new projects, resale condos or rental properties. Alternatively, feel free to send us an inquiry and one of our real estate agents can review your requirements!

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Fresh Editorial

The Editorial Team is made up of Property Professionals with years of experience in the Bangkok Property Industry. Articles and reports are drafted using first-hand experience and local expertise!

The Team is always excited to hear from our readers via [email protected]