The average price of condominiums could grow at least 8% in 2018, despite the looming land and buildings tax, says property consultant Nexus Property Marketing Co.
Managing director Nalinrat Chareonsuphong said the land and buildings tax, due to come into force in January 2019, is unlikely to harness the increase in land prices in Bangkok, allowing condo prices to keep rising.
“There is unlikely to be forced sales among landowners who are pressured by the land and buildings tax,” she said.
“If the tax is effective, they have options to apply to their assets anyway and will not need to sell the plots.”
As land prices will keep rising, condo prices will also rise next year. This year the average selling prices of new condos in Bangkok rose by 8% to 130,600 baht per square metre from 121,000 baht per sq m last year.
The average increase of condo prices in the past five years was 9% per year.
Pathumwan and Ratchathewi districts saw the highest increase in condo prices, with a rise of 16% to 234,000 baht per sq m on strong demand.
Land costs in these locations were also higher while new condos were limited in supply over the past several years.
For inner-city locations, the average selling price rose by 12% to 210,700 baht per sq m. In Yannawa and Klong San districts, where condo sales were healthy, the average selling price also increased by 12%. In Bangkok outskirts, the increase in price was slight at around 5%.
According to Nexus’ market research, the number of new condos launched in Bangkok this year hit the highest in a decade with a total of 62,700 units from 128 projects.
The new condo supply launched this year was 15% higher than the five-year average, which was some 53,600 units per year.
The total condo supply in the market was 550,000…