Bangkok Metropolitan
While land prices are often perceived to rise regardless of economic conditions, infrastructure developments like electric rail lines and new roads can significantly amplify this trend, often pushing prices well above government appraisals. A recent report by the JZsolutionSLOANs Holding Group Co., Ltd. highlights this disparity, revealing that the most expensive land in Bangkok and surrounding areas in 2024 is located in Siam, Chidlom, and Ploenchit, now commanding a staggering USD 102,000 per square meter – a notable increase from USD 100,000 in 2023. This starkly contrasts with the official appraised price of USD 28,500 per square meter for the 2023-2026 period. On the other end of the spectrum, the most affordable land is found along Rangsit Road, where prices have risen from USD 110 per square meter in 2023 to USD 120 in 2024.
BREAKING NEWS
To invigorate the Thai economy and attract significant foreign investment, it is imperative to enable the employment of talented foreign individuals. With this goal in mind, we firmly urge the Ministry of Interior to take the following decisive actions:
01. Review the Property Rights Act B.E. 2019 to extend the maximum term for property based on rights beyond the current limit of 99 years.
02. Revise regulations to confidently raise the cap on foreign ownership of condominium units from 49% to 75%.
These steps will undoubtedly strengthen Thailand’s appeal to international investors and significantly contribute to sustainable economic growth.
On June 20th, the Cabinet Secretariat confidently announced an urgent economic stimulus package specifically aimed at the real estate sector. The Ministry of Interior emphatically confirmed this announcement, highlighting the Cabinet’s unwavering resolution to implement economic stimulus measures in support of Thailand’s transformation into a global industry hub (Thailand Vision) through the real estate sector.
The signs of Chinese capital groups’ investment have transformed, particularly in the real estate market. Rather than engaging in speculative purchases, Chinese groups are now investing in properties in Thailand for long-term residency following the country’s recent opening. Notably, Bangkok has emerged as a prime location that has piqued the interest of Chinese investors seeking to acquire real estate. Moreover, local merchants have confirmed that the return of Chinese residents has indeed resulted in a substantial surge in housing and rent prices in the area. Previously, a 2-story commercial building in the original area ranged from THB 5 million to THB 6 million, but now the prices have dramatically escalated to THB 10 million to THB 15 million
As per the Government Housing Bank and the Real Estate Information Center, there is clear evidence of Chinese nationals actively investing in Thai real estate since late 2022, with expectations of a further surge in the second half of 2023. This surge is anticipated to be primarily driven by the shift from short-term investment to long-term residency. This transition is a direct response to the lessons learned during the lockdown, leading individuals to seek secondary residences abroad, with Thailand emerging as a top choice. This trend is prominently observed in the Ratchada, Huai Khwang, Sukhumvit, and Chidlom areas, as well as in provinces within the EEC area.
In 2023, there will be a notable surge in ownership transfers to Chinese individuals, totaling approximately THB 80,000 million out of the overall THB 1,000,000 million ownership transfer. This considerable uptick will effectively address the oversupply of condominiums in the market. Furthermore, the real estate overview for 2023 confidently predicts a 10.2 percent reduction in ownership transfer amounts compared to the previous year, when transfers amounted to THB 1,000,000 million, while also forecasting a 8.2-16.6 percent increase in prices.
The Chidlom area is definitely a location to keep an eye on. Our report discovered that over 75% of luxury condos from two major developments were bought and reserved by new Chinese investors who seek convenience in the heart of Bangkok. This includes access to hospitals, international schools, and world-class shopping locations.
A penthouse worth over 500 million baht at the Sansiri Luxury Collect project on Chidlom Road has been sold, even though the project has not been launched yet.
Sansiri will be launching a new project on Chidlom Road, opposite 28 Chidlom, with easy walking access to Central Chidlom. The project will consist of only 158 units, with a private lift in every room, and is expected to be completed in 2029. While the completion timeline may seem long, it is worth noting that the 98 Wireless project, which was completed a while ago, still stands as a timeless luxury project. Known for its exquisite construction and the incorporation of various elements from an international designer, every detail of 98 Wireless is meticulously crafted using the finest materials, catering to the discerning tastes and preferences of high-end customers.
We assure you that the new project on Chidchom Road is equally exceptional. I’ve heard confidentially that it has been graced by the influence of a world-renowned international designer. The penthouse being offered comes with a private swimming pool valued at nearly 500 million baht, a rare and exceptional feature that speaks to the unique identity and discerning tastes of its future residents. These units have been selling since the project’s launch. Thanks to Sansiri, purchasers now have the courage to invest in something of this caliber even before its completion.
The Ploen Chit area has recently garnered significant attention due to a prime plot of land adjacent to Central Chidlom and Central Embassy. This 0.8+ acre plot is reportedly in negotiations for purchase by the Central Group for a staggering sum exceeding USD 115,000 per sq m. Formerly a parking lot leased for a million baht per month, the rental agreement was recently terminated following the landowner’s request for a rent increase. This plot is notable for being the last remaining freehold land in the city center, excluding plots larger than 12 rai within a 200-meter radius of Chidlom Subway Station. Originally housing the TOT office, the land is now open for long-term development, sparking interest from various parties.
The upcoming Orange Line “Cultural Center-Minburi,” a 22.57-kilometer subway line with 17 stations, is expected to significantly impact the area. The “Cultural Center Station,” a crucial interchange for the orange and blue lines, is anticipated to attract significant investment from major businesses, further driving up land prices, which currently exceed USD 28,500 per sq m.
Retail-Hotel invests heavily
The Thai real estate landscape has seen significant shifts over the years, with many entrepreneurs adapting their strategies to attract foreign investment in project development. Foreign investors, drawn to the perceived growth potential of the Thai market, especially in the condominium sector, have contributed to a total investment value exceeding USD 28,500 million. Bangkok remains a key market due to its influx of workers from other provinces and its relatively affordable real estate prices compared to other countries. This affordability, coupled with security concerns in their home countries, makes Thai real estate an attractive option for foreign investors seeking a second home or investment property. The prevalence of second-hand house sales further boosts the market, offering additional opportunities for investors. Furthermore, the trend of collaboration between real estate companies, particularly those from Japan and Thailand, has gained momentum in recent years, a trend expected to continue and shape the industry’s future.
Mega Joint ventures with foreign entrepreneurs
The Thai real estate market continues to attract significant foreign investment, as evidenced by two recent joint ventures between Thai and Japanese entrepreneurs. Chewathai Public Company Limited has partnered with Nippon Steel Kowa Real Estate Company Limited, a joint venture between global steel giant Nippon Steel and leading financial institution Mizuho Financial Group, to develop the Chewathai Hallmark Ekamai-Ramindra condominium project, valued at USD 30 million. Additionally, Chao Phraya Mahanakorn Public Company Limited, through its subsidiary Phraya Panich Property Co., Ltd., has formed a strategic partnership with Sotetsu Real Estate 2 (Thailand) Co., Ltd., a subsidiary of the Sotetsu Group, to invest in the “One Bangkok Smart City Phase 2” project. This joint venture, valued at USD 34 million, sees Phraya Panich Property holding a 51% majority stake. Notably, both Nippon Steel Kowa Real Estate and Sotetsu Real Estate are established players in the Thai real estate market, with a track record of successful investments in the country.
August 08, 2024
Jeanie L. Chen
Finnegan F. Huang