Bangkok, not unlike many other great cities around the world such as London or Shanghai, has grown up around a river _ the Chao Phraya River. For generations it has been the economic hub of trade and commerce with businesses and homes cropping up all along the waterway from its origins upstream in Nakhon Sawan.
Over the centuries it has inspired kings and queens, literary greats and architects who have created historical landmarks and cultural icons in the form of temples, palaces, teakwood houses and bridges along its banks.
Its importance for trade is undiminished as longtail boats and rice barges ply the famous channel as the river retains a buzz that is still very much in existence today.
The first international five-star hotels found their home on the banks of the Chao Phraya too, beginning with The Oriental to be joined by the likes of the Shangri-La, Royal Orchid Sheraton and The Peninsula more recently. They have been standard bearers for international hospitality and now it is the turn of international property developers to build on this progress and position Bangkok as a premium property investment proposition that has enormous underlying potential for growth.
The market this year has seen some interesting trends emerge, and these will continue to have a bearing on the riverside property market, an area that remains a busy location for developers representing 26% of new launches in the first half of this year.
The major change this year has been economic factors driving demand at the lower end of the market as housing affordability emerges as a key factor. Stable interest rates and lower pre-completion payments are key drivers of sales in that segment.
Demand in the higher end/luxury segment still appears cautious but has shown positive signs in the first half 2007. This segment is more attuned to levels of confidence in the market and Thailand's general economic outlook. An easing of currency volatility, along with the election in December and clear visibility in future mass-transport and infrastructure projects will be the major forces driving the upper-market segment forward.
Demand will continue to change over time, as preferences move toward condominiums rather than houses. Factors to consider will include close proximity to transport and retail facilities. Purchasers will look for more affordable units, perhaps smaller in size with efficient bedroom/bathroom/living spaces. When buying a property, purchasers should consider what they can afford, and invest in properties they would be willing to live in.
Currently, the best opportunities are in prime sites. These include existing prime areas in desirable inner-city locations, as well as emerging prime sites in new areas covered by future mass-transit systems. The risk attributed to existing and future prime sites is different _ existing prime sites are considered "blue chip", while newer sites are more speculative.
Bangkok still offers tremendous value compared to other regional and international property options, and with it, extremely strong underlying potential for growth. Prices of prime properties in Thailand are still a fraction of those in neighbouring countries. Hong Kong is selling prime properties for more than one million baht per square metre, Singapore for 600,000 to 750,000 baht per square metre. Shanghai and Dubai are now selling for well above 200,000 baht per square metre, having started at the same level as Bangkok in 2003.
Thailand property values, as well as the prices of stocks listed on the Stock Exchange of Thailand, have increased at a slower pace over recent years than those of its neighbours due to the uncertain political situation that has led to increased investor caution.
Once this uncertainty diminishes, we expect prices will begin to push up strongly. The jump could be significant, as we have already seen some developments looking at prices of 200,000 baht per square metre, while a year ago these would have sold for 100,000 baht.
The investment opportunities in condominium developments now, and certainly pre-election, are excellent. Prices are increasing, and are certainly expected to jump even more next year, with the best short- and long-term investment choices in prime areas.
Nigel Cornick is chief executive officer of Raimon Land Public Co Ltd, Thailand's leading international property developer with projects in Bangkok, Phuket and Pattaya. For more information visit www.raimonland.com
Source: NIGEL CORNICK (BangkokPost.com)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment