Thailand: Top Asean countries for luxury properties

IF you are looking for real estate investment opportunities in Asia, the Association of Southeast Asian Nations (Asean) is definitely the region you shouldn’t miss.

Since its formation in 1967, Asean has grown into one of the most dynamic drivers of today’s global economy.

According to the “Investing in Asean” report published on the Asean official website, the combined gross domestic product (GDP) of the 10 Asean member states stood at US$2.43 trillion (RM10.45 trillion) in 2015. And with an average annual real growth rate of 5.2% from 2007 to 2015, the Asean economy was the third largest economy in Asia and the sixth largest in the world in 2015.

But for real estate investors, which of the Asean countries do we choose to put our money in? You may probably want to look at the big four in the centre of the region — Singapore, Malaysia, Thailand and Indonesia, as their capital cities all present great investment potential in the luxury home market with each attracting a different group of investors, according to Knight Frank Asia-Pacific head of research Nicholas Holt.

According to Knight Frank Research, the five-year capital gain of prime residential property as at the first quarter of 2017 (1Q2017) in Kuala Lumpur was a mere 2.1% while Jakarta (as at 4Q2016) and Bangkok registered a tremendous growth of 123.3% and 51.3%, respectively. Singapore, on the other hand, recorded a drop of 1.3%.

Bangkok: Keep an eye on the condos

High-end properties located in the Bangkok Central Business District and city fringe have performed consistently well in recent years with a range of impressive, exclusive projects setting new benchmarks for quality, facilities and price psm, says Knight Frank Thailand research and consultancy director Risinee Sarikaputra. The five-year capital gains from 1Q2012 to 1Q2017 for luxury homes in Bangkok was around 51.3%.

“Thailand remains a very positive long-term investment option as source markets for buyers seem to be expanding continually, giving investors plenty of scope for yields and capital returns,” she says.

Prime property in Bangkok will see limited growth in supply due to the lack of suitable land at reasonable prices. Hence, the selling prices of properties in this segment are estimated to increase further when no new supply is being added while demand is high, she says.

Of note is the rising demand for high-end condominiums in Bangkok. “Condominiums have become the highlight of the Bangkok property scene. The commuting cost and the rapidly changing lifestyles of Thais are the driving forces behind the boom, especially in the downtown condominium market. They attract not only the young, but also the elderly,” says Risinee.

Soucre: http://www.theedgemarkets.com/article/top-asean-countries-luxury-properties