Free mobile phones and the latest gadgets, furnishings worth up to THB1million and discounts of even more; are these the first signs that some Thailand property developers are struggling to sell units in new Thailand developments?
The headline-making ’90 percent sold in pre-sales’ and ‘More than 1,000 units sold in a weekend’ are still widespread, but what we not hear are the less-than-expected sales in, perhaps, less-than-desirable locations – and for very obvious reasons.
Bangkok alone will see a huge number of new units taking shape over the course of the next few years, but is their enough demand or potential demand to avoid a serious oversupply situation?
Real estate firm CBRE has also issued warnings of potential oversupply in suburban Bangkok in the studio and one-bedroom unit sector, and it is a fact that demand is outstripping supply of two-bedroom units and bigger in more central parts of the city.
Then there are other parts of the country, for example the border regions, where developers are in overdrive mode to have their projects ready by the end of the year. And Pattaya – where it I widely known an oversupply situation has been created.
The exact impact of AEC 2015, which comes into effect in December 2015, is unknown. Most industry experts feel the exact impact on the property sector will be both limited and not immediate. Some countries have already missed key deadlines to implement AEC-related measures.
On the one hand, some developers’ spokespeople have said AEC 2015 will mean an increase in Bangkok’s attractiveness as a hub for companies, and their C-level expatriate managers, and a resulting boost to the residential real estate sector.
AEC 2015 also means that some sectors of the Thai employment market can move to other, more attractive and better-paid markets, meaning possible vacancies and a large amount of empty units in some parts of the country.
Thais are widely understood to be among the most knowledgeable about AEC 2015, but any impact on the property market will not happen overnight, will take time to analyse and could also be negative just as much as they it is predicted to be positive for the Kingdom.
Have your say: What do you believe the impact will be for Thailand’s property markets with the implementation of AEC 2015 later this year? Requests for anonymity will be honoured.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story based on his experience as a property journalist and more than 25 years in the media industry. To contact him about this or other stories email andrew@propertyguru.com.sg
