How Did the Real Estate Sector Progress in 2018?

 

In just a blink of an eye, we are about to step into a new year. The Bangkok real estate sector in 2018 was quite vibrant, with a noticeable shift towards more diverse and integrated products. Here, TerraBKK summarizes the overall picture of the Thai real estate market in 2018 in this article

The Office Market Continues Steady Growth

            In the rental office market, there is currently a supply of approximately 8.83 million square meters, while demand stands at around 8.21 million square meters, indicating a high occupancy rate of 92.9%.

For Grade A office buildings in the CBD, the recently launched Singha Complex has a rental price of 1,200 THB/sq.m./month, reflecting a slight increase in rental prices for Grade A offices in the CBD. The average rental price rose from 982 THB/sq.m. in Q3/2017 to 1,009 THB/sq.m. in Q3/2018, with an additional supply of about 870,000 square meters of office space still under construction.

            The growth of the rental office market continues steadily, with new office supply emerging in Non-CBD locations, particularly in Ari, Bangna, and Ladprao, creating more job opportunities in these areas.

The Green Condo Trend is on the Rise

            In the condominium sector, it seems that the development of condos focusing on green spaces gained momentum in 2018, as they effectively meet the luxury customers' demand for access to green areas in the city. Such condominiums must be located in central areas where green spaces are scarce, like the Corner Ratchathewi, which guarantees over 150,000 trees, the Park Origin Phayathai, which features a Vertical Garden resembling a green mountain in the city center, or the The Line Phaholyothin Park, which has over 8 rai of garden space within the project. Many projects have been trying to highlight their unique features and focus on developing Green & Eco products, but none have stood out as clearly as in 2018.

Retail Must Impress Millennials

            The retail sector, affected by e-commerce or online shopping, has begun to adapt by creating new experiences for customers visiting stores, whether through exhibitions, installations, or various displays within shopping centers. At the same time, new competitors have emerged, with the most spectacular launch this year being ICONSIAM. Additionally, Gateway Bangsue and IKEA Bang Yai also opened at the beginning of the year.

Impact of Super Luxury Market from Credit Policies

            One of the most alarming issues is the policy from the Bank of Thailand, which announced measures to prevent NPLs in housing loans effective January 1, 2019. This policy requires a minimum down payment of 20% for loans on second homes and properties valued at over 10 million THB. This policy will significantly impact both investors and developers, leading to a noticeable slowdown in the condominium market for investment and the Super Luxury housing market, which has been booming over the past 1-2 years.

 

Article by: TerraBKK Investment Tips

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