Luxury single house demand still strong

Segment oft-overlooked by large developers

- +

Small property developer A-List Development Co is confident in steady demand for luxury single houses in inner-city Bangkok, despite rising competition from new supply launched during 2015-16.

Managing director Win Chirakranont said market competition in the high-priced single-house segment in the inner city is strong, but there is also rising demand from those living in condos and seeking landed residential units.

"Many families living in a townhouse or condo in the inner city want to expand and seek a single house to relocate into," Mr Win said. "This creates demand within this segment."

He said the number of luxury single-house launches in the inner city has risen over the past two years as newly launched condos in nearby locations are priced higher each year.

In the Sukhumvit area, new luxury condos are priced 200,000-300,000 baht per square metre on average because of soaring land prices.

In the inner city, most luxury single houses are launched by non-listed developers or small property firms. Large developers ignore this market segment as most of these projects are small in scale.

"Luxury single-house projects in the inner city usually have few units on each site, which disinterests large developers as there is not sufficient economy of scale for large developers," Mr Win said. "This creates opportunity for smaller developers."

He advised small developers to focus on small-scale projects with few units per project. They should also offer a unique design to win over customers.

Property consultant Agency for Real Estate Affairs said a total of 17 luxury single-house projects in Greater Bangkok were launched during 2013-16, with a total of 1,023 units.

They comprised 403 units priced 40 million baht or lower, and 620 units priced higher than 40 million. Of the 620 units, 35% were sold, with 401 units remaining unsold.

In the inner Sukhumvit area, there were nine luxury single-house projects with 896 units priced 40 million baht or below, and 20 units priced higher than 40 million baht. Of the units priced higher than 40 million baht, 54% remain for sale.

During the first half of 2016, there were 4,700 single houses launched in Greater Bangkok, an increase of 11% from 4,300 units in the same period last year.

In a separate report, property consultant Plus Property Co said demand for luxurious condominiums in Thong Lor remains strong.

The strong demand has been attributed to the limited number of new properties, coupled with the area's strategic location near businesses, department stores, and convenient transportation linkages. Condominiums have posted average price increases of 13% per year during the past eight years.

The rental market in Thong Lor has recorded annual returns of 5% as it appeals to both Thais and expats, especially Japanese, American and Korean nationals.

Anukul Ratpitaksanti, deputy managing director of Plus Property, said there are few new condo projects in the Thong Lor area because of limited space, with only two new projects a year in the last seven to eight years.

PROPERTY NEWS

City plan designates new flood zones

City plan designates new flood zones

The great flood that hit 36 districts of Bangkok will likely provide a good opportunity for adjusting or adding new water management regulations to Bangkok's new city plan and enco...

3 people commented about the above

Readers are urged not to submit comments that may cause legal dispute including slanderous, vulgar or violent language, incorrectly spelt names, discuss moderation action, quotes with no source or anything deemed critical of the monarchy. More information in our terms of use.

Please use our forum for more candid, lengthy, conversational and open discussion between one another.