Plus Property Takes Note of Lush Prospects for Luxury Properties Growth Averaged 7% and Returns 7-10%

10 เม.ย. 2019 ข่าวสารจากพลัสฯ




Plus Property Company Limited, the full-service professional property and facility management agency, discloses findings pointing to the attractiveness of the market for luxury properties.  The value of the market has grown by an average of 7% per year due to successful penetration of the buyers group with high purchasing power. The properties have also been viewed as investments that were able to produce a yield of 7-10% per year.  Sale at luxury projects proceeded faster than at mainstream projects, with 31% of projects having been able to sell out within one year. The luxury projects are said to have met success due to three elements: 1. Being situated on prime locations, 2. Having global-level partners to boost the projects’ capacity, 3. Having professional after-sale services.

Mr. Anukul Ratpitaksanti, Managing Director, Plus Property Company Limited, the full-service professional property and facility management agency, disclosed that Plus Property’s research and development division has surveyed the growth direction of the property market in 2019, and determined that properties targeting luxury-level buyers will experience significant growth.  Property developers have been increasingly steering their developments toward the luxury group of clients because of their high purchasing power, despite the challenges present in 2019 that include domestic and international politics as well as economic factors.  Developing projects to penetrate the luxury group of buyers also yields better cost effectiveness to justify the challenges involved in procuring city-centre land plots, which are increasingly hard to find and assimilate into a big plot that can be used for project development.

Growth of the luxury level property market averaged at 7% per year during 2012-2018, despite the unremarkable growth of the Thai economy and the continued presence of risks to the global economy during the same period.  The response rate for luxury condominiums during 2014-2018 has been attractive, averaging at 70%. Demand has also continually risen, due to the fact that the products are developed in a rather limited quantity compared to mainstream condominiums in the market.  As a result, luxury projects receive good response from customers with high purchasing power whenever they are developed. The absorption rate for luxury projects stands at 15 units per project per month, whereas the absorption rate for mainstream projects stands at 22 units per project per month.  These numbers point to a lower absorption rate for luxury projects, which is in line with the lower proportion of supply. However, when consideration is given to the percentage of projects that are able to sell out in less than one year, it is found that 31% of luxury projects were able to sell out in less than a year.  This compared to just 20% of 417 mainstream projects having been able to sell out in less than a year. Another factor that contributed to luxury properties’ attractiveness is the fact that they are considered investments that offered somewhat high returns. Owing to ever-increasingly prices, luxury properties have produced yields of 7-10%.  In areas stretching from inner Sukhumvit to Thong Lo, the yield stood at roughly 9.5%.

The success of luxury projects can be attributed to three primary elements.  Firstly, each project is situated on a prime location at a downtown economic hotspot.  A property at such location is difficult to obtain and is always in demand; prices of land and dwellings at said location is continually increasing.  Secondly, smart partnerships between developers and business partners that were specialists have been able to elevate the developers’ capability to deliver construction as well as service.  For example, partnering with globally-renowned designers allowed for the delivery of architecture that is striking and unique, in a manner similar to delivering a piece of art that is the only one of its kind.  Thirdly, offer of exclusive service has been able to create impressions on customers and resulted in more convenience in living and generation of added value for a project. For example, staffing a project with butlers that have been trained under a globally-accepted curriculum has allowed for service deliver that responds to many facets of lifestyle needs “For 2019, the scene of properties penetrating the luxury group is expected to be vibrant once again.  These properties answer to the demands of buyers who make the purchase for residential purpose, as well as investors and foreigners. Although the Bank of Thailand will start enforcing its LTV mortgage regulation measure in April this year, the purchasing power at the luxury level is not expected to be afflicted; this would especially be true of foreign buyers. The measure calls for the down payment to be increased to 20% and the mortgage amount to not exceed 80% of the price.  This is a level similar to many countries, namely the United Kingdom and New Zealand. Still, there are also numerous countries where the regulation on down payment calls for higher percentages than Thailand’s new mortgage rules. For example, the down payment is 75% in Singapore, 70% in Malaysia and South Korea and 65% in Hong Kong. Thailand’s new mortgage rules will therefore have no effect on investors from these countries”, said Anukul.


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