Asia’s HNWI looking to Bangkok for investment opportunities
Research from SCB’s Economic Intelligence Center (EIC) revealed that Thailand’s ultra-luxury residential real estate segment continues to perform well. Upscale condominium projects in Bangkok are seeing prices soar with some newly launched developments currently selling for THB500,000 per sqm.
The market for these projects is niche and demand for the segment is relatively inelastic and limited to high net worth individuals (HNWI). These are classified by SCB as individuals with investable assets worth more than USD1 million. As of 2014, there were a little over 90,000 people who met this classification. There are opportunities for HNWIs within the Asia-Pacific region to enter the luxury segment of the real estate market given their assets.
According to the EIC, the number of HNWIs in the Asia-Pacific region continues to grow in both population and wealth with China, India, Thailand and Indonesia being the fastest growing countries among the emerging markets. HNWIs are also buying more secondary homes outside their home countries with Bangkok being seen as a premier destination to invest. HNWIs own four residences on average with secondary homes being twice the size and nearly 50 percent more valuable than primary homes in many cases.
Thailand’s luxury residential real estate segment continues to be one of the most attractive among the HNWIs of the emerging countries in ASEAN. Bangkok property has high returns and is also priced reasonably when compared to other ASEAN cities like Singapore. The country’s real estate market is also stable with a strong institutional framework and renowned developers.
One other factor noted by the EIC was that lifestyles also play a role in the buying of any luxury property. More properties are now being bought for children in locations near where they attend school or for holiday residences. In Thailand, luxury villas in Phuket are one such destination popular with HNWI as a holiday spot.