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Chinese dethrone Japanese as Bangkok's keenest condo buyers

The Bangkok property market is dominated by Chinese buyers.

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Chinese buyers are dominating the Bangkok property market with no end in sight, says the Thai Condominium Association.

Prasert Taedullayasatit, the association's honorary president, said a large number of Chinese buyers have come into Bangkok's condo market in the past few years and the trend is expected to continue.

"The Chinese bought [condo units] with cash," he said. "A condo project near a mass transit station, for which construction was completed last year, saw healthy transfer among Chinese buyers, though they got a 10-20% higher price than Thai buyers."

Last year, condo transfers to foreign buyers were valued at a combined 71 billion baht, accounting for 27% of total condo transfers in Bangkok.

Of the amount, one-third or 23.6 billion baht was from buyers in mainland China and Hong Kong, up from about 13 billion baht in 2016.

"A possible issue with Chinese condo ownership is that most Chinese owners may not stay at the unit themselves, but instead rent out to a tour agent or use it as an Airbnb," Mr Prasert, also Pruksa Real Estate's CEO for premium business, said yesterday at a seminar on the condo market.

He said Chinese investment in Thai property development through joint ventures with Thai firms this year has outpaced all other foreign investors, including the Japanese, who were the most active during the previous three years.

A total of 19 companies from China and Hong Kong with a combined investment of 334 billion baht jumped into the Thai property market. The Japanese came second with a combined investment of 253 billion baht, followed by Singaporeans with 31 billion baht, Mr Prasert said.

Phattarachai Taweewong, senior manager of property consultant Colliers International Thailand's research department, said the condo market in Greater Bangkok will continue to look healthy this year.

New condo supply launched in Greater Bangkok in 2018 will be close to 2017 levels at about 55,000 units. But total value will rise by 25% to 250 billion baht because much of the new supply will be in the higher-priced segment.

In the first half, newly launched condo supply totalled 22,561 units worth a combined 103.86 billion baht, up from 20,958 units worth 49.5 billion baht in the same period last year.

"The sharp increase in value was derived from the fact that supply last year was mostly in outer city locations where unit prices are lower," Mr Phattarachai said. "This year, the majority of supply was in the inner city."

In the second quarter this year, the amount of new condo supply launched in Greater Bangkok was 8,511 units, down from 13,605 in the same period last year and 14,050 in the first quarter this year.

The average price per square metre of new supply launched in the second quarter dropped to 109,092 baht from 135,340 as most of the second-quarter supply was in outer areas.

In the second half, the average price per square metre of newly launched supply will rise to 140,000 baht as there will be some projects launched in prime locations like Thong Lor and Ekamai, Mr Phattarachai said.

During the past four years, newly launched condos priced at 50,000-100,000 baht per sq m had the largest market share with 103,101 units, accounting for 50% of the total.

Next was those priced at 100,001-150,000 baht with 48,332 units, representing 23%, and then those of less than 50,000 baht with 22,077 units, or 11%.

Condo supply launched during the first quarter of 2014 to the second quarter this year and priced at 100,001-150,000 baht had the highest sales rate of 81%.

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