The “Shutdown Bangkok” campaign waged on the streets of the Thai capital by opposition groups – and continuing political instability – may have temporarily dented the image of the “Land of a Thousand Smiles”, but Bangkok’s estate agents remain bullish.
“Buyers have a bit of a wait-and-see attitude at the moment,” says Claude Wagner, director of Engel & Völkers Thailand. “But most expats interested in purchasing here already have experience of living in Asian countries – if not in Thailand – and tend to be pretty sanguine about things. Over the past few years price rises of 5 per cent have been usual, but it could be less this year, and buyers may have a better negotiating position.”
According to James Pitchon, executive director of CBRE Thailand, “there hasn’t been any adjustment in pricing – what has happened is that the rate at which condominiums are being launched has slowed down.”
Powerful draws for potential buyers here include the city’s central location in southeast Asia, the proximity of beautiful beaches and trekking areas, and the excellent dining options and nightlife. More important, perhaps, are the developing SkyTrain and Metro mass transit systems: traffic jams may be the longstanding bane of life in Bangkok, but getting around Sukhumvit (in the centre east of the capital, and a favoured location for expats), Silom and Sathorn (two adjacent upmarket districts in the centre south) has become easier thanks to improving public transport.
In a recent sample of about 1,000 high-end condominium sales in the city, CBRE reported that 23 per cent of purchases were made by overseas buyers (official Thai housing statistics are notoriously difficult to obtain).
Hong Kong Chinese, Singaporeans and Taiwanese are enthusiastic buyers of Bangkok homes, with smaller numbers of British, German and Swiss purchasers.
In the past three or four years mainland Chinese buyers have started to buy in larger numbers – often one-bedroom units for holiday use.
In particularly attractive apartment blocks, foreigners make up more than 95 per cent of the demand for rental units, creating a buy-to-let market offering gross yields of about 6 per cent for one-bedroom units.
“When a solution to the political issues is found, I expect pricing for new condo launches at the very top end of the market to start at over 300,000 baht (£5,533) per sq metre,” says James Pitchon.
A 206 sq metre condominium at the Sukhothai Residences, a development in Sathorn next to the hotel of the same name, which includes three en suite bedrooms and two covered parking spaces, is on sale via CBRE Thailand with an asking price of 57.18m baht (£1.05m) Residents have access to a swimming pool, tennis court and children’s play area. The unit is listed as being on floor 12A, which is the 13th floor but some Thais consider the number 13 unlucky.
In Thonburi, just across the Chao Phraya river from Sathorn, Engel & Völkers is marketing a two-bedroom, two-bathroom condominium with 129 sq metres of living space on the 25th floor of a block directly on the waterfront. The asking price is 29.7m baht, and the shared facilities include a swimming pool, a gym and the use of a boat to ferry residents to and from the closest SkyTrain station.
Bangkok’s open-plan condo lifestyle may be comfortable but – except for the use of teak and other local dark woods for flooring in some high-end homes – there is little that is authentically Thai about most units. They are a world away from the wooden mansion where US silk merchant Jim Thompson once lived, with its steeply-pitched roofs, ornate shutters and flower-filled garden. The property, located in a “soi” (alley) close to Siam Square, was built in the 1950s and is now a museum.
The expat penchant for condominiums is not only due to changing taste: under Thai legislation, foreigners cannot own land and are only able to occupy houses as owners under a 30-year lease system (often with the option of a renewal for two or three further 30-year periods).
Foreigners married to Thais who want to own a house on its own plot of land can register the purchase in the Thai spouse’s name, which is a fairly common occurrence.
Meanwhile, condominiums can be bought by foreigners so long as they do not purchase more than 49 per cent of the surface area in any given scheme. In any case, overseas property purchasers are almost always cash buyers since money financing real estate purchases must be documented as coming into the country from overseas. Local mortgages are therefore not an option.
The buying process might be restrictive but expats in Thailand seem to be particularly happy once they have set up home. Researchers from HSBC ranked Thailand first out of 37 countries in the bank’s 2013 expat experience league table, which measured such criteria as accommodation, entertainment, healthcare facilities and opportunities for sports and travel.
But in Bangkok traffic noise and pollution can be a problem, and central sections of the city lack attractive, accessible parks and green spaces. Lumphini Park, for instance, is well located between Silom and Sukhumvit, but is rather scruffy.
In Sukhumvit, the Phrom Phong micro-district centred on the high-end Emporium shopping centre is particularly pleasant. Here, a two-bedroom, two-bathroom unit with 114 sq metres of living space in a building with a pool and a gym is on sale with Siam Property Group for 17m baht.
Bangkok has provided an exotic backdrop to much of the fiction of John Burdett, a British crime writer who has lived in the Thai capital since 2001.
“People here are very kind and helpful – they think it’s good for their karma. It’s also a very cosmopolitan place and the food is terrific, but the political uncertainty is a negative factor, and for some people the climate can be a bit too hot,” he says. “On my first visit I fell in love with the place. Whenever you come back here from overseas, it makes you feel good.”
● Buyers normally pay half the transfer fee of 2 per cent of the value of the property
● There are some 70,000 expat workers with work permits in the city (a quarter of them are Japanese)
● Bangkok has a long-standing air pollution problem but is now “on the path to cleaner air” says a UN report
● Daytime temperatures are usually between 30C and 35C all year round
What you can buy for . . .
£100,000: A 35 sq metre studio flat in Sukhumvit, sold as a condominium
£1m: A five-bedroom condominium in a building on the Chao Phraya river
£5m: An eight-bedroom house with a lift and pool near Phrom Phong