Uthai Uthaisangsuk, the company’s senior executive vice president, said demand for mid- to low-priced condominiums, lower than 80,000 baht per sq m, was strong with a take-up rate of 100% in the first half of the year.

“All projects in this segment were sold out within the first six months of being launched,” he said yesterday.

“Our five new condominium projects being launched in the rest of the year will tap this segment.”

Sansiri’s research found there was demand for 23,000 condominium units in the first half, for both newly launched and existing ones, up from the same period last year as demand shifted from low-rise to high-rise units.

The developer, which has delivered a total of about 12,000 condominium units to buyers to date, expects condominium demand in the second half will be more than 20,000 units with 50,000 units for the whole year.

Meanwhile, the launches of about 20,000 units have already been scheduled for the second half with another 10,000 additional units expected.

The take-up rate for condominiums last year was more than 30,000 units, about 49% of the total market, followed by townhouses at 30% and single houses at 20%.

Sansiri will market its D Condo brand for the low-end segment priced at about one million baht for a 25-square-metre unit. The projects will be located close to the skytrain extensions in the Taksin and Sukhumvit Road areas.

The developer’s new properties will comprise four projects with units priced from 80,000 to 100,000 baht per sq m and one luxury project with units priced above 100,000 baht.

During the first half, Sansiri launched two new condominium projects priced more than 80,000 baht per sq m with units starting at 4 million baht for 30 sq m. The average price was 6.5 million baht a unit. About 650 units have already been sold at the two projects worth combined 4.5 billion baht.

For the whole year, Sansiri’s average unit price is expected to be about 4 million baht as a larger number of cheaper units will be launched in the second half.

Mr Uthai said there should be a strong recovery in sentiment in the property market in the second half of the year, given the more stable political situation and an improving economy with higher exports and farm prices, bolstered by estimated economic growth of 4.5%.

The company has targeted 7 billion baht in presales of condominiums in the second half, up from 5 billion in the previous six months.

During the first half the developer transferred units totalling 9 billion baht. Of the total transfer value, 5 billion represented single houses and townhouses with condominiums accounting for 4 billion.

The company expects revenue of 16-17 billion baht for the full year.

Sansiri next month plans to launch Wyne Sukhumvit, a new condominium project worth 1.85 billion baht. Located in the Phra Khanong area, it will comprise 460 fully furnished units sized from 30 to 65 square metres with prices starting at 2.9 million baht a unit.

Bangkok Property

Research from CB Richard Ellis (Thailand) showed the majority of condominium sales during the first quarter of 2010 came from Thai nationals – not only as end users but also as buy-to-rent investors.

The Bangkok Condo Market Focus report noted that property developers are almost all focusing on new launches of one bedroom units. The amount of unsold developer inventory in recently completed projects and projects to be completed in 2010, together with resales prior to completion, will slow the launch of new real estate projects for 2- and 3-bedroom units downtown.

“Developers are going to focus on smaller units to keep the total price down, but there appears to be having been a move away from studios to one-bedroom units,” the report concluded. “There was a significant increase in numbers of new projects launched in peripheral areas, and in many cases there were strong sales.”

The report found the average achieved resale price of units in completed upscale and above units increased by 18.4 per cent year-on-year. The majority of new supply in Q1 consisted of one-bedroom units, followed by two-bedroom types.

Other key findings of the report were:

During Q1 2010, the total supply of downtown Bangkok condominiums reached 67,176 units (up 3.2 per cent quarter-on-quarter and 15.8 per cent year-on-year) an increase of 2,109 units (six projects).
During Q1 2010, the average asking price for an off-plan condominium unit (high-end and above) in downtown Bangkok was THB156,460 per sqm (US$4,835), an increase of 19.2 per cent quarter-on-quarter or 3 per cent year-on-year.
A total of 1,759 units in four projects in the downtown area were launched during Q1 2010, with the majority of new units targeting the high-end market.
The average achieved re-sale price of units in completed upscale and above buildings increased by 18.4 per cent year-on-year to THB121,805 (US$3,760) per sqm. Central Lumpini was the area with the highest average achieved resales price level (THB143,338 per sqm).

Bangkok property prices

Bangkok, Thailand land prices in central Bangkok have increased by 88% since 2007 and the upward trend is expected to continue despite the worst political unrest in almost 20 years which has left 21 dead and over 800 injured.

Research from real estate company Binswanger Brooker (Thailand) shows that prices for prime plots in the central Ploenchit area of the city have exceeded the heady levels of 2008 as listed developers such as Sansiri, Raimon Land and the Central Group invest heavily to secure prime plots for future development and major local investors look to diversify from their core businesses.

In March this year there has been an unprecedented amount of activity with two high value transactions taking place, belying the current political climate which has seen the violence on the streets escalate as opposition ‘red shirt’ protesters demand that parliament is dissolved and new elections called.

The company points out that the purchase by Sansiri of a 3,200 square meter plot adjacent to the American ambassador’s residence on Wireless Road for $36 million set a new record for land prices in Thailand, confirming that CBD sites are rapidly growing in value due to their scarcity.

Chief executive Nigel Cornick said that a limited supply of freehold land combined with high demand for central locations was driving prices up, even during the current political impasse. ‘There is very strong demand for compact but high-end residential condominiums in downtown locations from the domestic market which is boosting land values as suitable plots are increasingly few and far between for developers to purchase,’ he explained.

‘Some of the developers also plan to construct hotels on the prime plots, which further demonstrates that this is an asset class that local investors still have confidence in,’ he said.

Cornick added that prices would continue to rise sharply and one of the reasons for the flurry of activity in recent months was due to the withdrawal of the transfer fee, stamp duty and business tax exemption on the newly revised date of May 31.

‘The resale value of this category is also high as this aspect of the market matures, which is another factor drawing local investors to this product. We expect this positive outlook for these areas to very much continue in the future as values rise. It is also good news for Thailand generally as this research indicates the property market remains healthy despite the exposure Bangkok has to current political activities,’ he said.

Cornick added that with land values for freehold plots increasing, there was a likely knock-on effect for leasehold sites that would also increase in value, with major benefits going to the Crown Property Bureau who have significant leasehold land holdings in prime central areas of Bangkok.

Although the Thai stock market has seen steep falls because of the political unrest there seem few concerns that it will affect the real estate market.

This article has been republished from Property Wire.

Mr Panthep Tanchitikul, President of the Housing Business Association stated that the market value in 2009 would grow by 12%, against the anticipated 5%. Even though the sector got the impact from the economic and political situation in the first half of the year, the figure indicated just a slowdown.

The property market has shown significant revival since the middle of the year, due to the economic improvement and the marketing activities to stimulate the market. This would influence next year’s figures,with property market expected to grow 9-10% more in 2010.

SOURCE: Siam Daily News