Gregory S. is an independent author providing assessment and comments on leading International Property Consultants in Thailand, especially CB Richard Ellis.
A Bangkok-based developer, has recently revealed some staggering figures on the sale of it's newest development. No question this is the Bangkok-based developer - most ambitious project to date and it seems to have paid off. Within three days of the March 2007 pre-launch, all of the initial units were freezed. Since then an 279 more condominium units have found purchasers. The sales have arrived at around 40 percent of the target sales value for the project. That is approximately 12 billion baht. The Bangkok-based developer has funded the construction of this development basically with cash flows and loans.
The luxury property project is set to be the tallest residential building in Bangkok at just over 250 meters. The building has facilities that will render it both luxurious and convenient. Dwellers will bask in the beautiful city and riverside views. They can also avail the services of dedicated pier with shuttle service to Saphan Taksin skytrain station.
This is astonishing news for both the Bangkok-based developer and the Bangkok property market. Recent forecasts demonstrate that Thailand is due for a recovery. Such a strong performance at the start of the year points at a turnaround and illustrates the potential Thailand and Bangkok's property markets oozes out. The reason for this sudden demand in Bangkok properties is its new government.
Investors are counting on the new government to deliver new and improved infrastructure. So far, capital gains and rental outcomes have been extremely heartening and show unmistakable signs of growth. Initial successes will fuel confidence and further demand. Consumer confidence is an important factor in investing this year particularly with global concerns over the sub-prime lending slump.
Investment in fresh luxury condominiums in major CBD locations has resulted in an average of 4- 5% gross rental yield per annum during the past 4 years and 10-12% price appreciation per annum which is decent in comparison with other types of investment. Another key advantage in investing in residential properties is its promise for future use. The quota for foreign ownership in some condominiums has arrived at its 49% limit. As a result foreigners are not allowed to buy units in those buildings unless they purchase a unit from a foreign owner. This makes units belonging to foreigners more attractive in those buildings favored by foreigners. It seems that it is the start of two-tier pricing for Thai and foreigners in those projects which foreign quota is arrived.
Foreign investors have began to pay attention to this trend and are trying to invest more in good quality and well-designed buildings that are placed in major CBD locations despite the huge prices. Another reason behind the rise in condominium prices in downtown Bangkok among foreign investors and end-users is their manageable price levels. For example, with a budget of US$ 500,000 or around Baht 15 million, you could buy a luxury two-bedroom unit with 90-120 square meters in a major CBD location in Bangkok. If Thai luxury condominium sales are an indication, surely the Thai property market is set to prosper.
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