Luxury housing

The luxury real estate market continues to thrive despite economic fluctuations. While the impact of economic fluctuations is felt across various segments of the real estate market, the luxury niche remains strong and steadfast in the face of uncertainty.

Several developers have acknowledged that the Covid-19 pandemic has led to a contraction in the real estate market as a whole, affecting both demand and supply. However, the luxury segment has abandoned marketing and continued to grow. Korn Narongdej, the CEO of Raimon Land Plc, expressed confidence in the luxury segment, emphasizing the resilience of buyers in this market despite economic fluctuations. He stated, "The luxury segment across various industries remains very active and continues to grow. Even during the pandemic, the luxury segment demonstrated strong sales, indicating a sustained demand for premium real estate."

In response to this trend, Raimon Land strategically adjusted its portfolio, focusing exclusively on the luxury segment and halting projects that did not align with this strategy. The CEO of Singha Estate Plc, Titima Rungkwansiriroj, noted that the Covid-19 pandemic led to a change in consumer behavior, with a preference for low-rise homes over apartments due to an increasing desire for more space. She estimated that the luxury market is projected to grow by 35% in 2023, with the segment between 50 and 100 million baht standing out particularly strongly.

While other segments are experiencing volatility and economic contractions, the luxury real estate market continues to thrive, according to Artita Kasemlawan, head of the residential sales department at CBRE Thailand. She stated, "The luxury real estate market has demonstrated remarkable resilience and minimal impact from economic fluctuations. Before the Covid-19 pandemic, the market was in a balanced state, characterized by an oversupply and significant price increases." However, as the pandemic developed, demand decreased, leading to a reduction in supply. This supply shortage resulted in the absorption of existing units, restoring balance between supply and demand. As a result, prices remained relatively stable, as the luxury segment proved to be less susceptible to market fluctuations.

“In the first half of 2023, the luxury market continues to reflect the trends observed in the second half of 2022,” she said. “Unlike other segments that were heavily impacted by the pandemic and economic downturn, the luxury market, made up of affluent individuals, remains relatively unscathed.”

In the first quarter of 2023, the Real Estate Information Center (REIC) reported a significant 59% decrease in the number of new listings in the residential real estate market of Greater Bangkok. Vichai Viratkapan, the acting CEO of REIC, attributed this decline to several key factors, including an unfavorable economy, high levels of household debt, and the expiration of benefits for cost loans.

In contrast, the apartment market has been experiencing a constant decline in the number of new listings priced at 10 million baht and above in Greater Bangkok since 2019.

Developers view the luxury real estate market as a segment that still has potential, despite the negative impact of economic factors. They continue to offer new projects in this segment. In the second half of the year, the market will witness the emergence of several high-end projects. For example, Raimon Land plans to introduce three new projects in the fourth quarter with a total sales value exceeding 18 billion baht. These projects will be positioned in the ultra-premium and super-premium segments. One significant project is the Rosewood Residences Kamala, super-premium villas worth 7 billion baht, located on Kamala Beach in Phuket. Units will be offered at prices starting from 600 million baht. Singha Estate has announced the upcoming launch of five new premium projects worth over 10 billion baht. These projects will mainly consist of low-rise residential complexes, including two projects with single-family homes priced from 15-30 million baht and 30-50 million baht. Additionally, there will be housing complexes in two different locations, with the first offering units starting from 100 million baht, and the second offering units starting from 550 million baht. At the same time, SC Asset Corporation Plc remains committed to the luxury market, with 70% of its upcoming low-rise house projects worth 10.3 billion baht set to launch in the second quarter, focusing on units priced from 20 million baht.