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Resale condo market picks up

The escalating prices of newly built luxury condominiums in the city has created resale opportunities for used units in well-managed buildings, according to a study by Jones Lang LaSalle (JLL), a professional services firm specialising in real estate.

"There is continued interest in used luxury condominiums offering relatively attractive prices," said Daonum Lilavivat, head of residential agency business at JLL.

"In some cases, prices are half that of units in newly completed buildings or those under construction."

The company finds that new luxury condominiums in the central business district range between 110,000 to 200,000 baht per square metre, whereas units in older luxury buildings (aged 10 years or more) in the same area are available for 55,000 to 90,000 baht a sq m.

Besides benefiting from lower prices, buyers who purchase units in older buildings found that many of them offer larger common space and full recreational facilities. In addition, some buyers prefer the more cosy environment offered by older buildings rather than the "hotel-like" atmosphere in new buildings.

Ms Daonum believes now is a good time to buy used high-end condominiums as strong competition in the leasing market, spurred by the rapid growth of new units, has put downward pressure on rents.

Many owners who bought condominiums for investment purposes many years ago may now find it difficult to rent their units as most tenants prefer newer buildings. Moreover, those buying units to rent may also have to make a big cash outlay to renovate a unit prior to putting it up for rent.

Meanwhile, she believed buyers of old units can expect a capital appreciation in the long term as there are fewer sites or land plots available for new developments, while development costs of future projects are likely to rise.

"There are a number of older luxury condominium buildings that are well managed and have always been kept in a like-new condition. These units are able to sustain their asset value despite the high levels of supply entering the market over the past few years, and have a higher potential to enjoy capital appreciation once the market picks up," added Ms Daonum.