Buying Property: Comparing Construction Costs in Bangkok
May 24 2010 Categories: Thailand Business No comments yet
I deleted yesterday post and reposted today a new version
A reader remarked that I posted a lot of information as to real estate selling prices but did not give to date any information as to construction prices. The problem is that while there is actually a lot of data available on this matter, the information provided is not always coherent. In the post I cancelled I only posted the highest price range information but i felt that to do so was only giving you part of the picture.
A lot of foreign investors come in Thailand with the belief that investing in Thailand is cheap and that construction costs are very low. To believe that everything is cheap in Thailand is a misconception. Constructions prices are certainly lower here that in many countries but still, if you are looking for a quality construction you will have to pay the price.
The information in the two first tables is extracted from the “Valuers Association of Thailand” survey of 2009 cost of construction in Bangkok. The information provided in the third table was produced by Corner Stone Management a company that provided business intelligence to its clients.
Note: All the prices indicated below are per square meter and are exclusive of professional fees such as design, legal and marketing costs. As well, the prices quoted below do not include the price of land and the costs of lose furniture’s.
The first table below indicates construction prices for residential and high rise buildings as surveyed by the Valuers Association of Thailand
The information in the two first tables is extracted from the “Valuers Association of Thailand” survey of 2009 cost of construction in Bangkok. The information provided in the third table was produced by Corner Stone Management a company that provided business intelligence to its clients.
Note: All the prices indicated below are per square meter and are exclusive of professional fees such as design, legal and marketing costs. As well, the prices quoted below do not include the price of land and the costs of lose furniture’s.
The first table below indicates construction prices for residential and high rise buildings as surveyed by the Valuers Association of Thailand
| Buildings Construction Costs in Bangkok | |||
| Type | Specifications | Low Standard
Price per sqm |
High Standard
Price per sqm |
|
Residential building |
6 to 15 storey’s | THB 9,600 | THB 13,700 |
|
High Rise Building |
16 to 25 storey’s | THB 15,500 | THB 24,900 |
|
“ “ |
26 to 35 storey’s | THB 17,100 | THB 27,800 |
| 2009 Costs of Construction in Bangkok: Source: Valuers Association of Thailand | |||
While the prices indicated in this table are lower than the one indicated in Corner Stone table below there are still coherent as far as construction prices of high rise Building are concerned.
The second table below indicates construction prices for town houses and detached houses as surveyed by the Valuers Association of Thailand.
| TABLE 3 Houses Construction Costs in Bangkok | |||
| Type | Specifications | Low Standard Price per sqm | High Standard Price per sqm |
| Detached house | Concrete, 1 floor | THB 10,200 | THB 13,200 |
| Concrete, 2/3 floors | THB 9,300 | THB 13,200 | |
| Duplex house | Concrete, 1 floor | THB 8,600 | THB 11,600 |
| Concrete, 2/3 floors | THB 7,800 | THB 10,200 | |
| Townhouse | 2/3 floors, 4 m wide | THB 6,800 | THB 9,700 |
| Townhouse | 2/3 floors, 6 m wide | THB 8,300 | THB 11,100 |
| 2009 Costs of Construction in Bangkok: Source: Valuers’ Association of Thailand | |||
As you will see there is a huge discrepancy between the results of Valuers Association of Thailand and Corner Stone as to houses construction prices.
|
Item |
Building Type |
2009 1st quarter |
22009 2nd quarter |
2009 3rd quarter |
|
1 |
Detached House and Bungalow |
31,000 |
30,000 |
29,000 |
|
2 |
Terraced House |
18,000 |
17,000 |
16,000 |
|
3 |
High Rise Average Standard Apartment |
25,000 |
24,000 |
23,000 |
|
4 |
High Rise Luxury Apartments |
37,000 |
36,000 |
35,000 |
|
5 |
High Rise Apartments – Grade B |
31,000 |
30,000 |
29,000 |
|
6 |
High Rise Office Tower – Grade B |
25,000 |
24,000 |
23,000 |
|
7 |
High Rise Office Tower – Grade A |
31,000 |
30,000 |
29,000 |
|
8 |
Light Industry Factories |
21,000 |
20,000 |
19,000 |
|
9 |
Heavy Industry Factories |
27,000 |
26,000 |
25,000 |
|
10 |
Single storey conventional factory |
16,000 |
15,000 |
14,000 |
|
11 |
Hotel – Grade 3 star |
40,000 |
38,000 |
37,000 |
|
12 |
Hotel – Grade 5 star |
57,000 |
55,000 |
53,000 |
However, I do not think that this discrepancy means that one of the survey is right and the other wrong, but simply that the range of construction prices are wider for houses than for buildings.
Indeed, there are minimum standards of construction that will apply to the construction of the structure of all high rise buildings whether Grade B or luxury building.
But in the case of the construction of a house the material to be used not only for the finishing but also for the construction of the house structure will entirely depend from the tag price of the house. We believe that Valuers Association of Thailand construction prices for houses is based on a survey of houses in the lower and medium price segment while the prices indicated in Corner Stone survey are in relation to the construction of houses in the higher price segment.
Note: This post is an excerpt of Rene Philippe Dubout: “How to Safely Buy Real Estate In Thailand” second edition to be published in November 2009 (the first edition was published under the name “How to Safely Purchase Real Estate Offshore: The Case of Thailand”.
About the Author:
The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.
http//:www.renephilippe.com
© Copyrights 2009 – Rene Philippe Dubout – This article may be reprinted if information about the author, the websites, and the URLs remain intact
Originally posted 2009-10-06 08:05:27.
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- Buying Property: Is it the right time to buy?
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