Resale and rental values matter for owners looking to trade up.
Among the elements that turn a residential condominium into a hot property is the ease with which it can be resold or rented out because many buyers only want to hold such a property for five or 10 years and not forever, says Apisit Limlomwongse, managing director of Nexus Property Consultants Company.
This mindset stems from longer-term preference of the majority of the people, Thais and foreigners alike, to live in single houses or townhouses, which makes an exit strategy vital.
''After they live in a condo for a while they feel congested and look for land,'' says Mr Apisit. ''So the demand is not just at the entry but also at the exit.''
Pricing is the dominant factor in any market and when it comes to condos, it is now noticeable that progressive developers are building more compact units, which reduces the overall cost.
''For example, one-bedroom units costing three to four million baht are selling well while five to six million baht for two bedrooms are also selling well _ buyers today don't really notice whether a unit is big or small, only that a two-bedroom unit costs this much.''
What's not hot these days, says Mr Apisit, are units costing less per square metre than the average market price but with a steeper total. This includes old units with big bedrooms, which are difficult to sell. ''If you look at unsold units at various developments, these are the two types: oversized units and those in a bad corner. Most developers get stuck with these, generally the good one-bedroom ones are all sold out.''
Aside from compactness, other features buyers seek include efficient functions, attractive layouts and balconies.
Another factor that has a strong impact is the marketing campaign, which is constantly changing and affects sales. Mr Apisit observed that it is no longer enough to just place advertisements in newspapers because today there are many other media channels and tactics that can be used to create anticipation, notably the internet. ''Today you can have viral mail that is sent out and creates a buzz and builds up fever first.''
It is becoming dangerous to stick to old marketing methods because they don't get the attention of buyers, and can make projects or developers look old-fashioned.
The steady demand for condos is borne out in a Nexus survey showing that during the first five months of this year, around 10,000 new units entered the market, including newly completed and newly launched ones, with the sales average at projects being 65%.
''The demand is okay, but if you ask whether it's strong, we can't say that because there are 3,500 units left unsold,'' Mr Apisit added as a caution.
Nexus's research also shows a big range of condo prices with those costing 30,000 baht a square metre available in Huai Khwang, and running up to an average of 80,000 to 90,000 baht per sq m in the Sukhumvit, Silom and Sathorn area. Those costing around 40,000 to 50,000 baht per sq m are clustered around Phaya Thai and Phra Khanong.
Mr Apisit noted that condos in Phra Khanong area are spreading beyond the Phra Khanong bridge and have even reached Soi 101/1. New projects are anticipated in Soi Lasalle and Baring (Sukhumvit 105 and 107) because the skytrain extension is a selling point.
Also while the impact of both the skytrain and the subway systems is the same, the sway of the skytrain system seems to be greater because residents can clearly see the progress of construction, while subway construction is not only hidden, it also takes longer.
Although condo buyers today tend to ask whether the development is close to mass transit right away, another key factor is whether it is close to established shopping centres and markets. ''That is another plus point and it means that sometimes the building need not be near the BTS or the subway _ if it is an established community.''
Some buyers continue to be keen on living close to their workplaces. ''A condo in Sathorn is not close to the train system but are people interested? They are. Condos near workplaces have sold well in the past.''
Nexus's research also shows that average condo size in the city's various zones is shrinking, with 40 to 50 sq m a popular range. ''Right now the zone that has big units is Rama III and that could be because of the river view.''
Definitely not hot are projects deep in sois, especially very large developments as people worry about access and traffic.
Mr Apisit added that it was also risky to build in an area where there is surplus supply, especially a pricey development.
''Previously we chanted location, location, location _ that's the formula for success _ but this is not true today.''
While the anxiety over political and economic conditions is palpable, Mr Apisit noted that the situation is not as bad as people think with buying power still apparent, even though people are worried about the near future.
Source: Bangkok Post
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