THAILAND’S luxury home market, with prices ranging from 25 to 100 million baht, is now attracting more mid-sized and new entrants as the mass market is saturated amid declining purchase power but this segment could be more challenging than they had anticipated, PPTVHD 36 quoted an analysis by Kiatnakin Phatra Bank (KKP) as saying today (Sep. 29).
While opportunities remain at the luxury level catering to high-end buyers in a strong financial position it is not akin to the broad market but rather one with specific and limited demand.
Actual sales figures for Bangkok and surrounding provinces show that only 700 to 800 such lavish homes are sold each year, accounting for just 8 to 10% of total detached house sales.
Sales are primarily concentrated in the 25-50 million baht price range. Details are as follows:
– Houses in 25-50 million baht range – 7.9% of total detached house sales;
– 50-75 million baht price range – 1.5%;
– 75-100 million baht price range – 0.4%;
– 100 million baht and higher range – 0.3%.
While the luxury housing segment may seem attractive, this market is not as open as the mid-range bracket. Demand is highly specific: most buyers pay cash and look for quality of life, not just size while seeking privacy and uniqueness. Meanwhile, developer supply is rapidly increasing in many locations, leading to oversupply in some areas.
The key factor is good location
While a good location for luxury homes is of utmost importance, this does not always mean being near the BTS or shopping centres. It must have special characteristics, such as a quiet alley, privacy, natural views or abundant green space, proximity to international schools, leading hospitals, and a reputation that indicates status. Locations perceived as good for condominiums or mid-range homes, such as congested BTS lines, may turn out to be poor locations for luxury homes because they lack the peace and quiet as well as privacy that buyers want.
Luxury homes are not mass-market products. Therefore, making the wrong choice – for example, a location that does not please target buyers, a home design that is no different than typical homes, or an overly high price – can become a ticking time bomb. This can lead to capital and liquidity loss as well as brand image damage. However, developing a project that truly meets the target audience’s needs, through location, design, and true value, can be a challenge. Projects that are successful would sparkle like fireworks, even during a quiet market.
What makes a luxury home more than just a home?
Beyond the number of bedrooms, bathrooms and luxurious materials, modern luxury homes must meet standards for strength and disaster protection. These include earthquake-resistant structures, weather-resistant materials and flood-proof drainage systems. These reflect the fact that luxury is not just about aesthetic appeal, but also about ensuring a home’s value and safety in all situations. Examples include impact-resistant roofing to resist storms and heavy rains, waterproof and anti-mold materials to prevent flooding and moisture, laminated and tempered glass to reduce the risk of shattering, and fiber-reinforced concrete (FRC) to increase flexibility and resist vibrations.
It would not be enough for developers in this top tier of the housing market to just follow trends with a deep understanding of the unique needs of their customers being of utmost importance. Adaptation may range from customisable home designs to using rare and unique imported materials as well as a premium after-sales service team that exceeds expectations.
Most importantly, developers would have to select specific locations that align with the lifestyles and needs of the target market, such as areas popular with foreigners, near golf courses, valued as rare land plots, as this would help create a unique image and increase the project’s long-term value.
CAPTION:
Top and Front Page Luxury homes. Top photo – Amarin TV, Front Page photo – Thai Rath
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