The Growth of Real Estate Thailand
The entrance of ASEAN Community or AEC in the previous year causes the stimulation in many businesses and the expansion and connection of economies in 10 countries.
One of the most active businesses unavoidably is the real estate business because the international transfer of labors requires residence including the more investment comparison in every country.
In this case, “Mr. Sopon Pornchokchai”, the president of Agency for Real Estate Affairs or AREA, a property valuer and real estate researcher, revealed the survey “Real Estate Market in ASEAN” in the big cities such as Jakarta, Phnom Penh, Hojimin, Manila, and cities in Thailand.
The overview of Thailand’s property market in the year 2016 of the residential projects in Bangkok grows 10% in terms of a number of units and value. After 2015, there were new projects opened 107,821 units, a decrease of 6% compared to the expectation of 10%. This is the result of the Thai economic slowdown. In contrast, the overview of the new projects’ value increases 21%.
“According to the tendency in the year 2016, if we believe in the government’s anticipation that the economy will grow 3.5%, it is expected that the property market in the next year will grow 10% in unit number and value, whereas the average price tendency around the country will rise 20-25% after the Treasury Department announces the new property valuation in 2016-2019.
Mr. Sophon added that for the property market in AEC, the first 3 tops cities for investment are Jakarta in Indonesia, Manila in Philippines, and Phnom Penh in Cambodia, respectively.
As for Hojimin in Vietnam, it is still attracted the investment less than Phnom Penh due to the property price in Vietnam has been increased quite high for a period of time.
“The investment attraction of Jakarta, one comes from the demographic structure in Indonesia, which the traffic is the most crowd in ASEAN, resulting in the demand of residence in the urban, especially condominium. Furthermore, the real estate business and the national economy continue to grow, due to the change of government and the promotion of investment policy previously. This includes the good infrastructure.”
Regarding the mean of real estate price in the year 2015, comparing 5 cities from 5 countries, Bangkok in Thailand has the mean price per unit amounting THB 3.37 million; Phnom Penh in Cambodia has the mean price per unit amounting THB 4.7 million; Hojimin in Vietnam has the mean price per unit amounting THB 3.9 million; Manila in Philippines has the mean price per unit amounting THB 2.85 million; and Jakarta in Indonesia has the mean price per unit amounting THB 4.43 million.
The new residential projects in Bangkok this year, the mean of price increases to THB 3.981 million, Phnom Penh to THB 6.63 million, Hojimin to THB 2.83 million, Manila to THB 2.4 million, and Jakarta to THB 4.43 million.
Mr. Sophon regarded that Thailand is one of ASEAN countries which is able to attract the investment in real estate although the recent economy becomes to slow down and the World Bank reduce its economic growth. However, according to the market survey of real estate in comparison to ASEAN countries, the selling rate of the existing projects and the new projects remain at the good level. The selling rate of the existing project is 72% and the new project is 52.8%.
At the same time, the increase of house price compared to the previous year, it remains at the interesting level which is 3% per year, Phnom Penh 5.7%, Hojimin 3.9%, Manila 4.4%, and Jakarta 3.2%.
In regards to the return rate of the investment in the rental property market, Jakarta has the highest return rate at 8.8%; secondary is Hojimin at 7.1%. Manila is 6.2%, Thailand 5%, and Phnom Penh 3.2%.
“The overview of ASEAN property market remains in the highest economic growth of the world. To suggest, Thai real estate enterprises should search for the investment opportunity in ASEAN region.
For the investment strategy in ASEAN real estate business, to invest with the local investment is suitable, due to the fact that they understand culture and behavior of consumers in the country well.
Ms. Nalinrat Chareonsuphong, managing director of property consultant Nexus Property Marketing, said that the tendency to open the super luxury property project in the year 2016 is still active. Primary, there would be not less than 10 projects with the total value amounting THB 15,000 million: 5 condominium projects, and the other 5 projects including urban houses projects amounting THB 35-80 million and city boundary area amounting THB 20-150 million.
Comparing to the year 2015, there were 21 projects available, 2,500 units amounting THB 20,000 million. In these projects, 9 projects were a condominium or approximately 1,800 units which are regarded as the highest, while the selling rate of the entire market in average is 53%: condominium 57%, urban house 60%, and city boundary area 43%.
The selling price has been risen as well, particularly the new condominium price which has been anticipated to amount THB 320,000/m2 in average, 1.5 times higher than the new condo projects in the entire market whose price is THB 122,100/ m2 in average.
“The factor affects the super luxury property market continues to grow due to the foreigners acquire houses and condominiums in Thailand more. This is because the selling price in Thailand is still cheaper than the price in Honk Kong, Singapore, Taiwan, and Japan.
Furthermore, there are foreigners from the new countries such as Cambodia starts to seek for the new target. The condo location expands from Sukhumvit, Lang Suan, and Sathon to Rama 9. The housing project reaches to the research center area and Rama 9 while the houses on the city boundary area are in Bang Na, Suvannabhumi, Rachaphruk, and Kalpapruek, for example.