Long-term Leasehold Condo Becomes New Option For Urbanites

Real Estate Press Releases Tuesday February 5, 2019 14:28
Bangkok--5 Feb--Agate Communications

NEXUS reveals the survey of leasehold condominium, which represents less than 1% of total condominium in Bangkok. Most of leasehold condominium are in the city's center and in the high potential locations where the developers cannot buy the land or where the land belongs to the state agencies and the Crown Property Bureau. Such locations cover Ratchadamri area, Langsuan and Rama IV.

Mrs. Nalinrat Chareonsuphong, Managing Director of Nexus Property Marketing Company Limited (NEXUS), said that the supply of leasehold condominium in the center of Bangkok has a total of 4,500 units from 22 projects. Of total, more than 67 percent are located in Langsuan and Rajdamri. When analyzing only the new supply that was launched over the past 2-3 years, it reveals that the projects on these special locations show very high potential and have the clear target customer group, for example, I am China Town in Chinatown, Sinthorn Residence in Langsuan and Four Seasons Private Residences on riverside.

The price of leasehold condominium is varied upon many factors including locations, building completion, and quality of that project. Many super luxury leasehold condominium projects often hire five-star hotel chains to run the management or some mixed with 5-star hotels or grade A serviced apartments, to add value to attract more foreigners and increase sales in the projects. Generally, leasehold condominium can be leased up to 30 years. The selling price of resell leasehold condominium ones is supposed to decline when the leasing period is shorter. But in reality, the price of many leasehold projects was not declined. Instead, it has increased because of the quality of units, the good maintenance from the projects' owners and high demand in particular locations. Besides, price of leasehold condominium has increased despite shorter leasing period and it sometimes generates the annual yield of 7-10 percent, which is higher than freehold condominium in the same location.

Mrs. Nalinrat added that the leasehold condominium will become more attractive in the future because of many factors including the rising price of land in the heart of the city that makes the landlord prefer leasing to selling their land. Price of leasehold condominium are at least 30-40 percent cheaper. It allows buyers to make the decision easier. Besides, the super luxury condominium with the leasehold contract are mostly in the very premium locations including Langsuan or Rajdamri. When analyzing the living platform of Bangkokians in Millenium era, they need convenience in life including commuting from one place to another and other amenities as well as to shift to single house when they are older. Therefore, to buy leasehold condominium is another interesting option for them. Plus, Thailand is stepping into an aging society and these people are another group that are interested in leasehold condominium as most of them remain work and have high purchasing power. In overall, the purchase of leasehold condominium are worthier for them because they need the safety in life, live in convenient locations, and are able to access the hospitals easily. NEXUS forecast that condominium for these old people tend to be more leasehold.

From the capital market perspective, leasehold condominium usually require more deposit and contract payment than freehold condominium. Leasehold condominium requires the deposit of 30 percent and the bank provides the loan for the remaining 70 percent. However, the Bank of Thailand's new policy that revises the regulation for buying the second or the third home that requires the deposit of 20 percent enables leasehold condominium to competable with freehold condominium in terms of investment capital. For the return on investment, leasehold will give higher yield as the price is lower and most are in the areas that have high demand for rent. Besides, the money that is saved from buying at cheaper price can go toward other investment. The proper size and the design that respond to the demand in each location are the core factors to make the rent successful. Lastly, the international market has a bright future for leasehold condominium because of several factors such as the familiarity of foreigners particularly from Singapore and Hong Kong as they can own leasehold condominium more easily than freehold ones including other conditions, for example, there will be no problem of money from overseas transfer especially Chinese buyer as money transfer will not be required.


Latest Press Release

CFTE ผนึกกำลัง MACALLINE จัดมหกรรม CBD-IBCTF (เซี่ยงไฮ้) ยิ่งใหญ่กว่าเดิมในปีนี้

China Foreign Trade Guangzhou Exhibition General Corp. (CFTE) ผู้จัดมหกรรมแสดงสินค้าตกแต่งอาคาร China International Building & Construction Trade Fair หรือ CBD-IBCTF (เซี่ยงไฮ้) เตรียมผนึกกำลังกับ MACALLINE แบรนด์เฟอร์นิเจอร์ตกแต่งบ้านชั้นนำของจีน...

CFTE Partners with MACALLINE to Present An Upgraded CBD-IBCTF (Shanghai) 2019

China Foreign Trade Guangzhou Exhibition General Corp. ("CFTE"), organizer of the China International Building & Construction Trade Fair (CBD-IBCTF (Shanghai) or "the Fair") will partner with MACALLINE, a leading Chinese home furnishing and service...

ITOCHU partners with MQDC on Whizdom Asoke-Sukhumvit, investing in upscale Bangkok condominium

In its first investment in Thai property in over 20 years, Japanese giant ITOCHU has invested in MQDC's Whizdom-Asoke Sukhumvit condominium, reaffirming the global appeal of Bangkok real estate. 21st February 2019, Bangkok – MQDC has formed a joint...

ภาพข่าว: เอสซีจี ซิเมนต์ ก้าวไปอีกขั้นกับนวัตกรรม 3D Cement Extrusion Printing รายแรกในไทย

นายสยามรัฐ สุทธานุกูล (ขวา) Chief Marketing Officer-Cement and Construction Solution Business ธุรกิจซีเมนต์และผลิตภัณฑ์ก่อสร้าง เอสซีจี และ นายเฉลิมวุฒิ สงวนญาติ (ซ้าย) หัวหน้ากลุ่มงานวิจัย Mortar Technology หน่วยงาน Research and Innovation Center...

Photo Release: RML commences development of the most iconic One City Centre project

Prof. Dr. Surakiart Sathirathai (4th from right), Chairman of the Board of Directors, Lionel Lee (3rd from right), Chief Executive Officer along with the Raimon Land Plc (RML) management team are seen together in this joyous moment of the "One City...

Related Topics