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PROPERTY SCENE: FUTURE TRENDS IN BUYING LUXURY PROPERTY
By admin | June 18, 2009
Source - The Nation Website
Contributor: ALIWASSA PATHNADABUTR
MANAGING DIRECTOR OF CB RICHARD ELLIS THAILAND
More and more wealthy people in Bangkok are shifting from living in a house to a condominium. We have seen many condominiums launched over the past five years, but how many of them match the top-end buyers who are end-users and wish to occupy the condominium as their main home? CB Richard Ellis believes that there are only a limited number of developments that really match the needs of high-end owner occupiers. Buying a luxury home is no longer just a matter of looking at the design and quality. Design is a subjective issue reflecting the individual style and preference of the buyer. Ultimately, the trend is for something simple, with style and high quality. Developers, therefore, should return to offering what buyers really want rather than always trying to create something new in the market. The search for a unique design often results in a niche product that appeals to a small group of people or a design, which may not be practical or functional.
In the luxury market, apart from the issue of location, good quality and design, which are still the main criteria; we are noting changes in demand for luxury property to include other factors.
People are increasingly seeking well-being and a good quality of life. There is a trend towards living closer to nature even in the city where many high-rise buildings block the views from the windows. While green areas are very rare in cities, condominiums having open views overlooking greenery are always the most popular among luxury property buyers.
Residential property, including villas and condominiums, managed by branded hotels or serviced apartments is another trend among the rich. The reason behind this is the high standard of management and services. The standard of management ensures that the asset value will be enhanced in future, a factor that is particularly sought after by those who buy for investment purposes.
Simply branding a property is not sufficient, there need to be a range of services offered by the hotel or serviced apartment operator.
In the current market, condominiums usually do not provide services. The building will be managed by the juristic person or a management company appointed by the juristic person. The services provided are only in the common areas and include maintenance, security and the upkeep of facilities.
The cost of providing additional services will be reflected in the higher common area management fees which have to be absorbed by the buyers. This is not objected to by the top tier buyers who realize that there has to be an additional cost higher than the normal rate of common area management fees.
Condominiums that are managed by hotels or serviced apartments and offering services such as cleaning, laundry, room service, limousine and a concierge service are increasingly in demand at the top-end of the market.
The mixture of very small units and large units is also of concern to buyers in the upper segments, who tend to prefer to live in an exclusive environment with similar types and sizes of units; in other words, they prefer to live among the neighbors with a similar level of wealth. The marketability of such projects during the development period may not be ideal for developers because units with a higher total price sell at a slower rate. To achieve the certain requirement on percentage of sale, there is usually a mixture of several unit types from one to three bedrooms in these projects. That is why there are very few luxury buildings that will match demand in the top segment of the market.
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