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The year of the town house in Thailand

Posted by Alicia Koo on February 19, 2015
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Feb 19, 2015

This year will be ‘The year of the town house’ in Thailand, according to the latest research from real estate firm CBRE.

The company noted how high net worth Thais are showing a renewed interest in property, be it residential or land plots.

The domestic midtown market in Bangkok is fed by a generational shift in local lifestyle that is seeing younger, smaller households relocate to mass-market condominiums, it revealed.

The super luxury market has restarted, with new projects actively launched in prime downtown locations. Individual foreign investors from Hong Kong and Singapore are once again exploring opportunities in high-end residential properties.

Bangkok CBRE Forecast sales performamce


The downtown condominium market in 2015 will be competitive, with the launch of many new developments, but continued demand will ensure that opportunities exist for the canny investor.

We are seeing the return of foreign investors, drawn by the more stable political situation and lack of opportunity in their own markets, noted CBRE.

The outlook remains bright for super-luxury projects.

Despite being a slow year overall 2014 saw units at five super luxury properties achieve record-breaking prices upwards of THB300,000 per sqm; namely 185 Rajdamri at THB 330,000 per sqm, and The Sukhothai Residences, The Ritz-Carlton Residences Bangkok, Magnolias Waterfront Residences, and Marque Sukhumvit, each at THB310,000 per sqm.

“The luxury market has proven to be solid with a low cancellation rate – unlike the speculative market,” said Aliwassa Pathnadabutr, Managing Director, CBRE.

Bangkok CBRE average off-plan asking prices

CBRE added that It is important to note how these properties did not achieve these prices based on one single factor. Location no doubt played a key role, but these projects managed to tick several boxes including understanding market requirement in terms of unit sizes, style of architecture and interior design, space and functionality, a high standard of specifications and attention to detail.

Other selling points, such as internationally branded management, amazing views and, most crucially, a prime location, were also key to achieving top prices.

Buyers paying a premium price naturally expect a premium product, said Aliwassa.

“The products that achieve new benchmarks in price are the latest buildings with advanced specifications when compared to older generation buildings.:

“This is a niche market which serves the top-end segment,” added James Pitchon, Executive Director – Head of CBRE Research, Thailand.

This price increase is reflected, to a somewhat lesser extent, in the resale market as well. Buildings that have been completed over the last 10 years in prime locations, such as Athenee Residence and The Park Chidlom, have achieved prices in excess of THB200,000 per sqm, which is double the price when they were sold off-plan in the mid-2000s.

Good management, timely maintenance and renovations are the key to value appreciation in older buildings. However, this is still somewhat of a rarity in Bangkok where the emphasis is on new product, according to CBRE.

This is why location is not the sole determinant when it comes to price. It is possible to have a condominium completed before 1997, where prices have barely moved over the past 20 years, just down the road from a relatively newer, well-maintained product with better specifications.

“Each building,” according to Pitchon, “has its own individual market characteristics.”

With land prices on the rise, this could be a new golden era in the making for owners of older buildings who invest in renovation of common areas and system maintenance at their properties – making them more attractive to prospective buyers.

The midtown and suburban market is facing challenges of its own.

CBRE has calculated that more than 100,000 units are due for completion over the next 18 months, and the majority of these will be one-bedrooms.

Various developers have reported cancellation rates ranging between 15 percent and 20 percent, but the real stress test will come when these units are ready to transfer title.

Can developers convert all the presales units under construction into recognised revenue by transfer of title to buyers, or will some speculative buyers default because they cannot resell?

Will some bona fide end-user purchasers not be able to get mortgages due to the increasingly stringent lending regulations?

Affordable landed property, such as townhouses and single detached houses, are of much interest to families that would like a large living area and, perhaps, a garden with ample parking.

Families needing a large living area will not select a midtown or suburban condominium because the price per sqm of living areas at a condominium in a midtown suburban location is higher than the cost per sqm of living areas in a townhouse or single detached house due to higher constructions costs.

A 100-sqm condominium on Rattanatibet along the MRT Purple Line would cost about THB7 million, but for that same price you could buy a single detached house with 200 sqm of living area, less than one or two kilometers from a Purple Line station.

Demand for midtown and suburban condominiums will be limited to one-bedroom units. Given that prices of single detached houses have been rising because of higher land prices, we see townhouses as being the most affordable and therefore most popular type of landed property, said CBRE.

“The next couple of years will be the years of the town houses,” said Pitchon.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email



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