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The Bangkok Property Market 2009 / 2010

Well as we near the end of the year, which a traditionally a time when the Bangkok Property Market eases of and waits for the start of the New Year with the hopeful new wave of investment that accompanies the start of the new year (in normal times), we can have a look over the market this year.


Bangkok Property Market for the First & Second Quarters of 2009

Well in the First Quarter of 2009, we were right in the vortex of the Global Recession, as some may recall March 9th was the real low point for the stock market’s of the world, and this of course was reflected in all Investment Markets as well as that of Real Estate in Bangkok.

The average Bangkok Condominium prices dropped by 15-25% depending on the location, quality and age of the buildings.

And although this is always the best time to buy, of course very had the courage or conviction. Throw into the mix the strange character of the Bangkok Property Market, particularly in regards to Bangkok Condos, and very few purchases were made.

Many Thai Real Estate investors are indeed cash-rich and therefore very few have large costly an strenuous mortgages that they have to service, therefore if the market takes a dip, then they just sit tight and wait for the recovery. This attitude and situation is so alien to foreigners that we often have to explain to our clients why Rental Prices or Sales Prices are not being reduced to the levels they would deem to be sensible.

Anyway back to the market and in the first 6 weeks of the year the market was in panic mode, and this was reflected in attitude of virtually every client we came across.

Not only did they want down-size from a larger or more expensive property to a cheaper smaller unit in perhaps a marginally inferior location, but also they did not want to commit to even a 6 months Rental contract. A typical client who was perhaps living in a 2 Bedroom Condo in Sukhumvit and paying THB 40 000 for about 120sqm, would come to us prepared to downgrade to a 70-80 sqm 2 Bedroom condo in Ratchadaphisek area of town. Therefore downgrading on almost every front, in order to reduce their costs. However as I said they would want a 3 months contract as they thought they may have to leave Bangkok at any point.

Of course landlords were not interested in such a contract so it took long negotiations to talk them up to at least 6 months contract, which most were at least willing to do, if not reluctantly.

Increased Supply in the Bangkok Property Market

Well the saying goes, it never rains but it pours! And that is true so often in economic environments, and the Real Estate Market in Bangkok is so exception.

First a brief bit of history: In 1997 Bangkok was heavily involved in the Asian Economic Crisis, which hit the Property Market in Thailand very, very hard. In fact from 1997 almost all private infrastructure development was halted as banks licked their wounds and large potentially impressive structures were left to rot in the Bangkok Sky Line. Therefore since 2003 when new properties started to hit the market there has been a huge up take of units from new developers and over 40 000 units have been released by developers over the last 3 years, most of them taken up by investors.

However the Global Economic crisis did have an effect on developers and has resulted in a mixture of:

1. Projects launches being cancelled,
2. Project launches being delayed indefinitely
3. Projects launches delayed until recovery looks possible
4. Projects already in production being delayed, whilst their clients’ cash-flow situations improve.

Two such examples Point 4 are The Wind on Sukhumvit Soi 23, Asoke, this project built by Major Development PCL and The Emporio Place built by TCC Capitalland PCL on Sukhumvit Soi 24, Phrom Phong.

Both projects are prestigious, both aimed at the higher-end of the market. Both were initially scheduled to be completed in the 1st & 2nd Quarters of 2009, but now they will delay completion till 1st & 2nd Quarters of 2010. This does not mean the projects have been abandoned in a similar fashion to developers in 1997, but instead work has just been slowed so that the market has time to recover before transfers are forced upon the buyers.

Third and Fourth Quarters 2009

However of course any crisis is always outlined by opportunity and sometimes delays work to one’s advantage. This applies to Asian Property PCL (AP) and an example of Point 3, AP had announced a brand new luxury condo to be launched in Oct 2008 on Sukhumvit Soi 28 near the The Emporium shopping center. They were toying with the idea of branding the condo The Metropolis Condo, a brand name they had never used before.

As the condo was in such a prominent location, this building was going to have to high-end and suitably highly priced. Therefore AP had to make sure the recovery was well on the way before the launch. Also in addition to design of the building and timing of the launch, they had to make sure that the building sounded as prestigious as it was, and therefore it was judged ‘The Metropolis Condo’ just did not cut it. Therefore given the success and reputation of 3 of their previous projects which had been well received by the market and were currently being enjoyed by their clients, AP went with the brand name ‘The Address’. After all “The Address Sukhumvit 42’ located in Ekkamai only 300m from the Ekkamai BTS station, ‘The Address Chit Lom’ located only 450 m from the Chit Lom BTS station and ‘The Address Siam’ only 400m from the Ratchatewi BTS station and all had impressed the Bangkok property investors who had been fortunate to buy the units.

The launch of the new building was made on September 2009 and “The Address Sukhumvit 28’ located 250m from the Phrom Phong BTS station was an instant hit. With over 400 units available to buy they managed to sell out all the 1 Bedroom units on the first day of the launch and almost all the 2 bedroom units by the end of the second day of the launch. In fact by the end of the second day, only 15% of the units remained available to buy! Quite amazing when it is considered that the average selling price was THB 150 000/ sqm, so an average sizes 50sqm 1 bedroom condo would cost THB 7.5m!!

Not only that, but AP have also launched “The Address Asoke’ located 50m from the new Makkasan Airport Link station, “The Address Sathorn’ near Surasak BTS Station and ‘The Address Phayathai’ again with a close link to the new express train line that goes to Suvanabhumi Airport . Again all these units have been selling well and have shown that Bangkok Real Estate is certainly in recovery mode.

Couple this with launches by TCC Capitalland, Major Development, Sansiri PCL, Lumphini developments and even more by Noble Developments it is clear that the developers see a trend of recovery in the market.


The last 9-12 months have been difficult and no one likes recessions or economic crisis, but unfortunately these are part and parcel of growth and development. But as long as Landlords, Tenants and Developers adopt adequate strategies to deal with the situations, then results can still be achieved.

And in the grand scheme of improvement in the Bangkok Condo and Bangkok Housing Market, some times a bit of a crisis is a good thing. It allows the market to cool down, not over heat and take stock of the situation.

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