The research found that many developers were launching condominium projects with asking prices of over Bt300,000 per square metre and the new norm seems to be Bt250,000 per square metre.

However, there will be winners and losers in the market, depending on product positioning and pricing.

With a log of options in this segment for buyers to choose from, CBRE is seeing slow sales in many projects. Unsold units in completed projects are being offered at discounted prices to clear the inventory.

“We believe that the winners in [the competition] to sell their luxury condominium projects will not be those projects with the best room layouts or design, but whose that can sell the right lifestyle at the right price,” according to the report.

According to CBRE’s fifth annual Global Living Report, Bangkok is ranked at 33rd out of 35 global survey of the world’s most expensive residential cities, with Hong Kong maintaining its position as the world’s most expensive.

The report profiles the property markets across those 35 key global cities. The results forefront investments in urban areas such as transport infrastructure, connectivity, retail, cultural centres and housing as the key drivers of economic growth.

Jennet Siebrits, head of residential research at CBRE UK, noted the latest report expanded from the previous 29 cities. They include some of the most exciting cities in the world, from emerging technology-driven powerhouses like Shenzhen and Bangkok through more traditional capital cities such as Rome and Lisbon, to rapidly evolving modern urban centres like Dubai and Johannesburg.

“The world’s greatest cities continue to transform to encourage innovation, increase their working and living populations and create new commercial opportunities for businesses,” she said.

The top three most expensive places to buy a residential property are once again in Asia. Hong Kong remains the city with the highest-value residential real estate, with an average property costing Bt39.52 million (US$1.235 million). Singapore remains in second place, averaging Bt27.97 million ($874,372) and Shanghai is third at Bt27.92 million ($872,555). As observed in last year’s report, all these cities have introduced cooling measures to keep prices under control.

Bangkok stands at the 33rd position with an average residential property price at Bt3.4 million ($106,383), followed by Ho Chi Min City at Bt3.29 million ($103,057) and Istanbul at the bottom at Bt3.11 million ($97,396).

The biggest year-on-year growth was experienced in double-digits by Barcelona (16.9 per cent), Dublin (11.6 per cent), Shanghai (11.2 per cent) and Madrid (10.2 per cent). London remains one of the top 10 performing global cities, with the average property price at Bt20.7 million ($646,973) although growth is low at 1.1 per cent.

“House prices increased year on year across 30 out of the 35 cities we looked at, although generally at lower rates than previously,” Siebrits said. “In general, CBRE is seeing house price growth slow across our cities as we move towards the end of a long property cycle. We would expect increasing interest rates to be affecting cities in the US, and various cooling measures affecting the Asia Pacific region, although Shanghai still saw robust growth.”

“We’re collaborating with five global designers for the interior design of our luxury residential collection to inspire our customers to decorate their residential units,” Sansiri Plc’s chief creative officer, Ou Bholyodhin, said in a recent interview with The Nation.

Sansiri Plc has introduced its luxury collection in four residential projects – 98 Wireless, Baan Sansiri Pattanakarn, the Monument Thong Lo, and Khun by Yoo inspired by Starck.

The five global designers who contributed their interior designs to the projects are:

Gert Voorjans, a multi-talented Belgian decorator famous for his distinctive eclectic style, as seen in the window display for high-end fashion label Dries Van Noten’s flagship store, who is responsible for a special unit in Monument Thong Lo;

Lorenzo Castillo, a Spanish designer who achieves a balance between the classic style and contemporary style through his daring designs, and also has worked for Spanish luxury fashion label Loewe on its window decoration for stores in Spain, Shanghai and Hong Kong. Castillo will decorate special units and the penthouse at the Monument Thong Lo.

Hutton Wilkinson, an American interior designer who also boasts a flair for home decoration and jewellery design, who will decorate special units and the penthouse at Monument Thong Lo;

Mary Fox Linton, a famous British designer, who stands out for her modern contemporary style and yet keeps British beauty close to her heart, who will decorate the show unit of Baan Sansiri Pattanakarn; and Phillippe Starck, the famous French designer and product designer who became a household name with his interior, industrial, architectural and product designs, and has also worked with YOO Design Studio to design the KHUN by YOO inspired by Starck. It was the first and only residential project Starck had ever collaborated on in Thailand, and will be ready to welcome its residents by the last quarter of this year.

“We believe that the luxury residential projects must move from a focus on function, which is now the normal standard for all of residential projects to achieve and be concerned about, and instead present a fashion statement that reflects their owners, just like other fashion-brand products in the market,” Sansiri Plc president Srettha Thavisin told The Nation.

“The value of a luxury residence is not only focused on its location and facilities, but also on the value of the brand itself and the unique design,” he said.

“This is the meaning of Sansiri.”

The developer now has a luxury collection in its portfolio worth Bt22 billion in total, as the company has stepped up as a global luxury brand and reinstated its leadership in the Thai real estate market. The company has targeted total sales of the Sansiri Luxury Collection portfolio reaching Bt4.5 billion by 2019 end.

Ou added that the company leverages its deep and thorough understanding of the behaviour and lifestyle needs of its customers in the luxury segment. They are increasingly opting for a worthy investment of their passion in property whose value endlessly increases through time as the brand differentiation is developed and sets the buildings apart from the competition.

“Our core marketing approach is emotional story-selling. Similar to the way global luxury fashion brands create riveting stories on exceptional material selection, the process of their creation and historical heritage, we focus on creating emotional connections to customers, as well as a unique experience from the moment a customer enters our sales gallery. We also emphasise the taste and preference of each individual customer in order to customise the sales approach and create an impressive experience,” he said.

Meanwhile, other property developers are also moving to use global architects and designers to design their residential projects.

For example, AP (Thailand) Plc, in 2015, opened its condominium units with interiors created by globally renowned Japanese designer Naoto Fukasawa, who has designed products for B&B Italia, Maruni and Issey Miyake. AP’s approach was intended to inspire its customers to design their residential unit under the fashion designer’s theme.

Ananda Development Plc also has selected both local and global architects as its advisers while designing its condominium projects. For example, the Thai architectural firm A49 designed the Ashton Chula-Silom. The company also joined with the internationally renowned Bangkok-based firm, commonly known as dwp, to design its condominium projects.

When people buy a condominium worth more than Bt10 million, they need a design to match the location and see that is also socially the right fit for them, Ananda Development Plc’s CEO, Chanond Ruangkritya, said.

“Location is still at the heart of building condominiums and other residences, but design and function are what inspires people to speed up their buying decision,” he said.

According to Knight Frank’s “The Wealth Report”, due to the rarity and limited number of luxury and super-luxury real estate projects, the ultra-high-net-worth individuals around the world are planning to invest more in luxury real estate. Total investment value in private real estate reached US$289,000 million in 2018.

In Thailand, Plus Property has revealed that the value of the luxury real estate market has seen an average growth of 7 per cent annually during 2012-2018. The luxury condominium segment alone had an average response rate of 70 per cent in that period. Up to 31 per cent of all luxury projects in the market were sold out within one year, while only 20 per cent of 417 real estate projects across all segments available in the market were sold out in less than one year.

Luxury real estate has also generated a high average yield of 7-10 per cent, while in projects located in the highly sought-after inner Sukhumvit and Thong Lor areas the yield can be as high as 9.5 per cent.

The survey found the rise in demand for low-rise property, including single detached houses and townhouses during the second half of 2018. Demand and supply are growing for both detached houses and townhouses, and sales are expanding from the previous year.

The supply of detached houses has increased by 13 per cent from the same period of the previous year, whereas demand increased by 46 per cent; the sales tally stood at 44 per cent of supply. Meanwhile, the supply of townhouses increased by 21 per cent and demand expanded by 26 per cent; sales were 47 per cent of supply.

Detached houses and townhouses in the suburban areas serviced by transportation linkages received a warm response from buyers. As for the direction of the low-rise market in 2019, PLUS expects the real demand for residency and momentum resulting from developers’ campaigns to expand the market at a similar level to 2018, despite the implementation of the LTV mortgage measures by the Bank of Thailand (BOT).

The company’s deputy managing director, Suwannee Mahanarongchai, said prices in the Bt3 million to Bt5 million bracket remain the market’s primary selling group and are able to generate decent sales in the suburbs and peripheral provinces of Bangkok. Development sites of property projects at this price level have increasingly expanded towards those areas. Meanwhile, improvement in transportation such as the construction of roads and several mass rapid transit lines to serve these areas is allowing for easier commutes to the downtown area.

The townhouse market has been found to be equally attractive. The townhouse market continually expanded in the second half of 2018, and supply on offer rose by 21 per cent over the previous year to 36,200 units – the majority of the units were priced within Bt5 million. Compared to the same period of the previous year, new supply within the townhouse market grew by 24 per cent at 16,000 units in the latter half of 2018. Demand response reached about 17,200 units, translating into a sales ratio of 47 per cent. Total demand in the latter part of the second half of 2018 rose by 26 per cent year on year and by 66 per cent over the first half of 2018.

According to the market trend, most property firms plan this year to launch low-rise residential projects, including townhouses and single detached houses.

“We revised our business model to focus on single detached houses and townhouses when we saw strong demand in this market segment,” LPN Development Plc chief executive and managing director, Opas Sripayak, said in a recent interview with The Nation.

“The demand to buy condominiums by both local and foreign investors, especially from China, was expected to drop in the second half of the last year till now,” he added.

Prasert Taedullayasatit, chief executive officer for the premium market at Pruksa Real Estate Plc, said the company had revised its business model to focus on low-rise residences – townhouses and single detached houses – because that is where the real demand is within the domestic market.

“For our premium market, we had to select the location and also design the products to match specific demand in the market. This year will be tough for property developers, but we continue to have confidence the market will maintain at least last year’s [level],” Prasert said.

Naporn Sunthornchitcharoen, who chairs Land and Houses Plc’s board, said earlier this year that the company had revised its business model to focus on low-rise residential projects for 2019 when they saw the demand for condominiums was going to drop.

This year, the company plans to start 16 projects with a total value of Bt26.96 billion, with 14 projects in and around Bangkok and two elsewhere in the country. All projects are single detached houses, twin-houses or townhouses.

Of the total sales for this year, 72 per cent are expected to come from single detached houses and twin-houses, 8 per cent from townhouses, and 20 per cent from condominiums, he said.

With regard to the BOT’s new measures to tighten credit underwriting standards for mortgages, Land and Houses has adopted a wait-and-see approach, Naporn added.

A survey by The Nation last week found a number of property firms preparing promotion campaigns in response to the inability to transfer residential units.

Land and Houses Plc, for example, has announced the resale, after some customers chose not to transfer units when faced rejection of their loan applications from commercial banks. Units in five projects are involved – The Bangkok Sathorn, The Room Charoenkrung 30, The Room Sukhumvit 69, The Room Sathorn-St Louis and The Key Sathorn-Charoenraj.

All units are ready for occupation and the company has opened them for viewing from now till May 10, with booking open on May 11.

LPN Development Plc has also launched its latest campaign, allowing free access to common areas for up to 10 years for customers who buy into its two resort condominium projects, including Lumpini Seaview Cha Am, as well as a discount price of up to 30 per cent for Lumpini Park Beach Jomtien. Unit prices start at Bt1.24 million. Some units for sale under that campaign came free when customers refused to transfer them after their banks rejected their loan applications. The campaign runs from now till the end of this June.

“We’re launching this campaign to boost our sales in the second quarter of this year, which was expected to drop slightly when most of our customers speeded up transfer of their residential units before the LTV measure took effect on April 1,” LPN Development Plc chief executive officer and managing director Opas Sripayak said recently. “As a result, we have to launch our promotion to boost sales in the second quarter of this year.”

Following the market trend, Government Housing Bank reports that new mortgage loans for April 2019 were recorded at only Bt9 billion, far below the expected Bt15 billion in approvals for the month. This is also lower than the first three months of this year.

The drop is caused by the BOT’s measure requiring an increase in down payment and a reduced loan-to-value ratio starting April 1, the bank’s president, Chatchai Sirilai, said recently.

He added that the latest measure to increase the tax refund based on the mortgage interest rate to Bt200,000 did not boost the property market.

“Most people who buy residences at a price not over Bt2 million per unit still have an income below the level at which they have to pay tax,” he said.

Meanwhile, the Real Estate Information Centre (REIC) of Government Housing Bank shows the inventory of condo units around the five mass transit routes has reached 14,790 units, worth up to Bt51 billion. (For details see graphic.)

It will take time to sell most of them – about 25-50 months depending on the location. Taking into consideration the increase in the number of resale condominium units in the second quarter, it is clear that the inventory of condos in the market will continue to rise and that it will take longer for them to sell.

This will also impact the property market, including new condominium launches through the rest of this year, as the inventory and resale units will be offered at a lower price than the new condo units. Then there are the costs of holding the inventory and the reduced profits from the discounted resale units, according to the REIC research.

REIC also estimates that the number of residential units in Bangkok and suburbs transferred in 2019 will be about 306,000 units, worth Bt745 billion, a drop of 15 per cent and 11 per cent respectively from 2018’s transfers of 363,700 units worth Bt839 billion.

Furthermore, second-quarter residential unit transfers for Bangkok and suburbs will reach only 71,000 units, worth Bt170 billion, the research forecasts. That’s below the other quarters when traditionally the demand slows.

Meanwhile, the first quarter of this year recorded 80,000 units worth Bt204 billion for Bangkok and the suburbs, as most homebuyers speeded up their transfers to beat the LTV measure, according to the research.

The research also estimates transfers of residential units in Bangkok and suburban areas will total 75,000 units, worth Bt178 billion, in the third quarter of this year, and 89,000 units, worth Bt193 billion, for the last quarter.

Don Nakornthab, BOT’s senior director for the economic and policy department, said the bank has forecast that market sentiment will change when the LTV measures cause a number of speculators to reject transferring their residential units. And that would mean the measures had protected the property market from speculators.

“We will monitor our measures to see their effects, which will reduce speculators in the market,” he said.

The investment budget is planned to help underpin a goal of pulling in revenue of Bt30 billion over three years by targeting more Chinese buyers.

“There are currently five projects in the pipeline that will be launched in 2019, with a total sales value of Bt15 billion,” Thongchai Busrapan, chairman, co-chief executive and president of Noble Development, said at a press conference yesterday.

Under the three-year revenue target, the company aims to boost its take by Bt10 billion for each of those years. This would mark a doubling of last year’s total revenue of around Bt5 billion.

The firm also plans to increase its return on equity from last year’s 15 per cent to 32 per cent in the next three years, while maintaining its profit margin at around 20 per cent.

These goals were set by Noble’s new management team, which was formed after a recent shake-up in the shareholding structure.

The company’s major shareholders include Thongchai, who holds 23.3 per cent of the shares, and Fulcrum Global Capital, which is wholly owned by Frank Leung, and has a 24.9 per cent stake in the company through nCrowne Pte. Ltd. BTS Group Holdings Plc has a holding of 9.9 per cent.

Thongchai said that given BTS Group Holdings’ involvement, there is the potential for future cooperation on projects with BTS. However, he did not reveal any concrete projects for such cooperation.

Frank Leung, vice chairman and co-CEO of Noble, said: “To achieve this revenue goal, Noble is aiming to target more foreign customers, particularly from mainland China.”

According to research by CBRE, Chinese make up the biggest source of foreign buyers of property in Thailand. The research suggests that purchases by Chinese accounted for up to 30 per cent of the total in 2018.

In 2018, Noble’s share of the overseas market for Bangkok condominiums stood at only 8 per cent. This has increased to 28 per cent in the first quarter of 2019.

“In the span of only two years, mainland Chinese buyers have overtaken buyers from Singapore and Hong Kong as the main driver of growth in Bangkok’s overseas property market,” Leung said. “Our goal is to continue to build on this progress and further target the growing overseas market of Chinese buyers.”

To do so, Noble will aggressively focus on realigning its product mix, which includes expanding its land acquisition locations further from the central business district and diversifying its portfolio.

Thongchai said the expansion of the BTS network to the north of Bangkok presented potential locations for Noble’s upcoming projects.

“Chinese buyers are looking to invest in the long-term,” Thongchai said. “They understand that land plots that are one hour or less away from the city centre can grow in value quickly as the BTS lines expand. Hence, land plots along the new BTS lines going up into the north of Bangkok are a potential location for the future.”

This thinking is behind the Bt3 billion investment budget for land acquisition in 2019. Thongchai said the company would maintain this outlay each year.

To help reach its ambitious target revenue of Bt10 billion a year, Noble will divest itself of some assets to generate immediate funds. It has entered into a sale and leaseback transaction for Noble Pleonchit Tower D, which will free up cash for redeployment, Leung said.

More than 500,000 visitors are expected to generate above Bt10 billion worth of trading over the six-day event running through May 5, ASA president Ajaphol Dusitnanond said yesterday.

The event has exhibitors from 40 countries taking up the full 75,000-square-metre space in Challenger Hall 1-3 at IMPACT.

Dr Acharawan Chutarat, chair of the Architect ’19, noted that this was the first time in the history of the architecture exposition that it had offered a “green experience”, creating eco-design exhibitions and activities covering every detail from using eco-friendly and recyclable materials to energy-efficient lighting and management.