Wealthy Property Buyers Keeping High-end Market Strong
According to the Thai Bond Market Association, property developers are raising record funds through domestic bonds to finance high-end residential projects in Bangkok. Despite the overall sluggish economy, THB54.2 billion worth of bonds were issued by Thai property developers within the first half of 2015. This represents about 75% of the total debt offered in the entire 2014.
The economy has made banks reluctant to lending money as prime borrowing rates have now reached about 6.5% while Land & Houses – Thailand’s biggest property developer – nowadays issues 3.31% 5-year bonds.
A majority of rich locals and foreign investors keep purchasing high-end/luxury condominiums in the heart of Bangkok, close to public transportation and popular shopping malls.
While mid to low-segment market is flat as mortgages are less and less granted to property buyers, the high-end segment is definitely booming. In the first half of 2015, value of premium residential projects increased by 281% y-o-y while cheaper condos have not seen any increase yet.