Investing in a Condo near the Electric Train before 2020 – a Bright Future with Rapid Price Rises
25 พ.ย. 2019
พลัสฯ อินไซต์
Investing in property, especially in condominiums, remains an attractive option due to a better return on investment than depositing money at the bank in hopes of gaining interest. Regardless of whether the property investment is made with the intention of renting out the property or reselling it, there is opportunity to receive capital gain upon selling the property.
Purchasing condominiums is a type of property investment popular among investors. Short-term investment may take the form of trading the reservation certificate. Long-term investment may take the form of purchasing a condominium room for future transfers, for renting out, and for reselling once the price has appreciated somewhat. The form of investment depends on each individual’s preference.
Investing in the purchase of condominiums near the electric train line, for the purpose of renting out the rooms or reselling them, has gained increased popularity among investors. This is due to the decline in land available for the development of new projects. The value of projects near an electric train station that are launching sales at present will increase in the future.
Location is key when investing in a condominium
An important factor to consider when investing in a condominium unit is the location. In order for the investment to become an easy affair, regarding renting out the room and reselling it, the condo’s location must have potential and must have selling points. This also means there will be opportunity to receive a high capital gain in the future.A location suitable for investment must be one that allows for convenient commuting; it should be adjacent to a main road or be easily accessible if it is instead served by a minor road. It is crucial at present for the location to be near a rapid transit station and other amenities that answer to the demands of living.
A location that is served by the complete line-up of schools, hospitals, other places of learning, malls and restaurants undoubtedly spells profit; renting out will be easy and reselling will yield a good price.
Faintly analysing the future for advantage
When selecting the location, it is important to also analyse future growth tendencies on top of observing the present situation. This helps in making the purchase decision, allows the investor to have additional confidence, and helps in the calculation of the property holding period.Analysing future tendencies can help shed light on when to keep the property to rent out and when to resell it; for some projects, the opportunity to make higher profit increases with longer term ownership.
The potential of certain locations can still expand. This means that a high-potential location at present – one that is near an electric train station – may become one with even higher potential when it becomes an interchange spot after an additional electric train line opens for service, when a mega-project takes shape nearby, or when the amount of existing local amenities such as malls and community malls increases.
These developments will reinforce the value and attractiveness of the condominium the investor chooses.
Once a crude future picture of the location you have selected becomes visible, and the impending changes and developments in its surrounds can be discerned, you will have gained an advantage for selecting the location and the property project.
Mass Transit in Bangkok
There are currently 3 major rapid transit lines in service within Bangkok. These include:- The BTS electric train, which commenced service in 1999 (19 years ago) and which is Thailand’s first rapid transit line. The service is subdivided into two lines: Sukhumvit Line and Silom Line. The BTS route runs through the heart of Bangkok, on top of major roads such as Phaya Thai, Sukhumvit, Ratchadamri and Sathon. Siam station is the interchange station for the Sukhumvit and Silom lines; it has also become Bangkok’s main station. The launch of the BTS Skytrain revolutionized the overall picture of mass transit in Bangkok, allowing commuters to travel more quickly and conveniently and spurring the development of various types of real estate such as hotels, malls and condominiums along the skytrain route.
- The MRT electric train, also known as the subway. The MRT commenced service in 2004 (14 years ago), becoming Thailand’s second rapid transit line. It ran underneath Ratchadaphisek Rd. and Rama 4 Rd., passing through important Bangkok locations such as Rama 9 intersection, Asok intersection and Lat Phrao intersection. The launch of the MRT service helped fill the gaps in Bangkok’s rapid transit service and boosted the potential of certain locations such as the interchange spots between the BTS and MRT lines. There are currently 3 such spots, namely Mochit/Chatuchak, Asok/Sukhumvit and Sala Daeng/Silom. The stations at all three interchange spots have higher passenger densities than other stations.
- The MRT Purple Line. The Purple Line commenced service in 2016 (2 years ago), becoming Thailand’s third rapid transit line. It connects to the preexisting MRT line at Tao Poon station. The Purple Line shuttles commuters from western Bangkok into the downtown areas such as Ratchada, Sukhumvit and Siom. Preparations are being made for the construction of the line’s extension: the South Purple Line that runs from Tao Poon to Rat Burana.
An update on rapid transit lines that will soon commence service
In addition to the aforementioned electric train lines, Bangkok and its vicinity are witnessing the construction of several more electric train lines that will ultimately open up many new locations for condominium investment.
- The Green Line extension (Mo Chit-Saphan Mai-Khu Khot) will run from the existing Mo Chit station along Phahon Yothin Rd. and straight into Saphan Mai, Khu Khot and Lam Lukka areas. This extension, whose service commencement is scheduled for 2020, will accommodate the travels of people living in northern Bangkok. A large number of new condominiums are presently being launched at spots adjacent to station entrances, such as those at Ratchayothin-Sena intersection and Saphan Mai.
The Blue Line extension (Hua Lamphong-Bang Khae, and Tao Poon-Tha Phra) is scheduled to commence service within 2019-2020.
The Red Line suburban electric train (Bang Sue-Rangsit) is scheduled to commence service in 2020.
The Yellow Line electric train (Lat Phrao-Samrong) is scheduled to commence service in 2021.
The Pink Line electric train (Khae Rai-Min Buri) is scheduled to commence service in 2021.
The Eastern Orange Line electric train (Thailand Cultural Center-Min Buri) is scheduled to commence service in 2023.
The expansion of the various rapid transit routes will result in growth and expansion of the urban area, which will no longer be clustered around city center. The urban area will spread to the middle layers of Bangkok as well as the current suburbs, in tandem with the reach of the electric train lines. Commute into the heart of the city will become convenient as a result of these new links.
A good location commands future price rises
Locations near rapid transit experience more drastic adjustment of sale prices than other areas. This is especially true for “rare item” locations (difficult to acquire land and no new project launches) such as Chit Lom, Phloen Chit and Thong Lo. In addition to them being situated near the electric train, these locations are surrounded by amenities such as malls, restaurants and community malls. Projects at these locales are managed by professionals, resulting in each project retaining a level of desirability on par with newly-launched projects.
- Silom-Sathon: The resale price currently stands at 210,000 baht/square meter and this price rises by about 7% each year. Average rent is between 700-1,000 baht/square meter per month, resulting in a rental yield of 5% per year.
Phahonyothin-Lat Phrao: The average resale price for the Phahonyothin-Lat Phrao locale currently stands at 150,000 baht/square meter, and this price has risen by 20-40% over the previous 5 years. Average rent is between 520-542 baht/square meter per month and rental yield is 5% per year.
Projects Worthy of Mention: The LINE Jatujak MochitPhra Khanong-On Nut: Average price stands at 122,000 baht/square meter at present, and capital gain stands at 40% (over previous 5 years). Average rent is 500-600 baht/square meter per month and rental yield is 5-7% per year.
There is an interesting case study for this location. Back when On Nut station was a terminal station for the Green Line BTS electric train, condominiums had a launch price that were not very high (starts at 68,000 baht per square meter). When service commenced on the On Nut-Bearing extension in 2011, this price grew continually and reached 122,000 baht/square meter in 2018. Those who foresaw the future had the advantage of buying at cheap prices and reselling their properties for high profit.
Projects Worthy of Mention: THE BASE Park East, THE BASE Park West, THE LINE Sukhumvit 71Wong Sawang: Projects surrounding Wong Sawang station have an average selling price of 90,000-100,000 baht per square meter. This price has been rising each year due to the land price increasing by 6% per year. Rent stands at 10,000-13,000 baht per month, for a rental yield of 5-6% per year.
Projects Worthy of Mention: THE LINE Wongsawang-
Phet Kasem: Locations near the electric train fetch an average selling price of 92,000 baht/square meter and rent of 10,000-12,000 baht per month.
Projects Worthy of Mention: THE BASE PhetkasemLand price signals the condo price
Appraisals of land prices is another source of information that can be used to compliment decision-making when investing. The appraisals may also come with analyses of each location’s potential. The appraisals data is used to evaluate the potential of a location as well as the potential of any future project. Agency for Real Estate Affairs’ (AREA) most recent evaluation of land prices along rapid transit lines reveals the following: Mochit-On Nut BTS: The highest price – 2.2 million baht/square wa – is found at Siam, Phloen Chit and Chit Lom stations. The lowest price – 650,000 baht/square wa – is found at Saphan Khwai station.
On Nut-Bearing BTS: The highest price – 800,000 baht/square wa – is found at On Nut station. The lowest price – 350,000 baht/square wa – is found at Bearing station
Bearing-Samut Prakan BTS: The highest price – 350,000 baht/square wa – is found at Samrong station. The lowest price – 110,000 baht/square wa – is found at Kheha Samut Prakan station.
Taksin-Bang Wa BTS: The highest price – 700,000 baht/square wa – is found at Krung Thon Buri station. The lowest price – 200,000 baht/square wa – is found at Bang Wa station.
Mochit-Saphan Mai-Khu Khot BTS: The highest price – 500,000 baht/square wa – is found at Ladphrao Intersection station. The lowest price – 65,000 baht/square wa – is found at Khu Khot station.
Bang Sue-Hua Lamphong MRT: The highest price – 2 million baht/square wa – is found at Sukhumvit (Asok) station. The lowest price – 300,000 baht/square wa – is found at Bang Sue station.
Purple Line (Bang Sue-Bang Yai): The highest price – 300,000 baht/square wa – is found at Tao Poon station. The lowest price – 100,000 baht/square wa – is found at Khlong Bang Phai station.
Red Line (Bang Sue-Taling Chan): The highest price – 140,000 baht/square wa – is found at Bang Son station. The lowest price – 60,000 baht/square wa – is found at Bang Bamru station.
When investing in property, especially in condominiums, choosing to invest in a location that has present potential and future growth prospects is considered advantageous. Living in a location near rapid transit and amenities provide a solution to living demands, and will result in the investment yielding satisfying returns from renting out as well as from reselling.
Purchasing a condominium unit for investment is not limited to new projects; oftentimes, well-priced resale units or second-hand units come around and change into your hands if your timing is right. Having a real estate agent provide you with consul can also help you add a condo unit with good potential and situated at a good location into your portfolio.
Find the condo you want here: Condos near electric trains, BTS Condos
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