Bangkok: Apartment prices shot up in 4 years
Apartment prices in Greater Bangkok have increased by an average of 48 percent over the past four years, while prices for townhouses and detached houses have risen by 36 and 25 percent respectively. This has been established by project developer Sena Development Plc in a study.
The six locations where prices keep rising are Kae Rai-Laksi-Ram Intra, Bang Sue-Nonthaburi, Ratchada (Lat Phrao-Makkasan), On Nut-Bearing, Bang Na-Suvarnabhumi and Taksin-Bang Wa. Prices rose from 68.000 baht per square meter (2009) to 100.000 baht (2013).
The average price of a detached house has risen in 4 years from 4,72 million baht to 5,91 million baht and of city houses from 1,66 million baht to 2,25 million baht.
Next year, the supply of apartments will slow down as developers limit the number of projects. There are many "negative factors" looming, says Samma Kitsin, director general of the Real Estate Information Center.
He mentions the shortage of labor and the large supply of 70.000 to 75.000 units this year. There is an oversupply in some locations; sales are declining and there is fierce competition. Moreover, the land costs are so high that it is not possible to develop salable apartments there.
(Source: bangkok mail, October 16, 2013)
This price increase applies to new construction. Existing apartments do not participate in this or only very little.
That was once explained to me by someone who knows real estate in Thailand. It's because Thai people mainly want to buy new. They prefer to pay more for a new home than for a comparable existing home. Strange choice, but good. I think it has something to do with status too...