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Entrepreneurs and experts on the subject of real estate have had to come to terms with the fact that the sector has been facing enormous challenges over the past couple of years.
There are many reasons why this situation has occurred, one being rising oil prices, leading to inflationary pressure on building materials, which subsequently forced many developers into raising their prices or suffering a loss. Nevertheless, some sub-sectors, such as the condominium market, have continued to perform well, since most consumers are attracted to the fact that the properties are typically centrally-located, affordable, and located in convenient places near useful facilities and amenities.
And while some reports suggest there is little to feel positive about with regard to the real-estate sector, Wissanu Suchartlumpong, an executive from Asian Property Development, says there is certainly one area that continues to offer plenty of potential – high-end, luxury homes (classified as properties costing five million baht [US$143,000] or more).
As oil prices headed sharply higher, many consumers were attracted towards condominium units, he says, since they are centrally-located, offering maximum convenience and reducing the owner's reliance on having to drive to their regular weekday destination (typically the office, or other workplace location). As this trend emerged, the market for stand-alone housing units began to ease. However, at the luxury end of the market, such concerns are far less apparent. High-end demand remains strong
Wissanu says that the growth experienced at the luxury, high-end of the property market offers some hope for both entrepreneurs and investors amid the global recession.
At this end of the scale, the consumers tend to be high net asset individuals with an abundance of cash, who wouldn't blink when handing over 5-20 million baht in cash for their dream home.
These folks wouldn't dream of applying for a home loan since they are independently wealthy, he says.
Regular folks would typically turn to a home loan
to finance the purchase of a home and since the domestic and global
economic situation is challenging, to say the least, this has created a
negative environment at the lower end of the real-estate sector.
Persons looking to buy a first home or a cheaper home are financially
dependent upon employment opportunities, while commercial banks given
the current situation are all the more cautious about lending during
the current economic situation.
High-end hopes
Wissanu says consumers looking to purchase high-end, luxury homes are
either already wealthy, or wealthy enough to require only a 60% home
loan to buy the house of their dreams.
“No matter how bad the economy is, these people have nothing to do with
that. If they want to purchase a home costing 10 million baht, they can
often just hand over the cash, without difficulty,” he says.
Wissanu says that Asian Property Development's own high-end project,
called The City, is well placed to benefit from the situation and the
company has been specifically focusing on this sector of the
real-estate market.
The City properties are actually located on two sites. The City at
Rattanathibet Road comprises three phases, including over 200 units,
while The City at Rama V is made up of two phases. The first phase at
Rattanathibet Road has just officially opened with 70 units. Units cost
between 7-8 million baht.
For further information regarding The City developments, visit Asian Property Development's website at http://www.ap-thai.com .
Hyde Park: Comfort, convenience walk hand-in-hand
Please note that the photos accompanying this story serve to illustrate the high-end market as a general grouping. Taken from ThaiAsiaToday.com's archives, you can read more about the homes by accessing the archive story here .
Biz Spotlight 
Biz Spotlight
Thailand offers plenty of business and investment opportunities. Whether you’re an entrepreneurial individual, a growing small- and medium enterprise, or a cash-rich corporation looking to establish or expand your presence in the kingdom, Biz Spotlight provides up-to-date insights into the country’s business and financial sectors.
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