Chiang Mai will see weak supply and demand in the real estate sector this year as buyers continue to shy away from the city’s condominium and low-rise markets, the Bangkok Post reported. Even with several new transportation infrastructure projects in the works for the area, the property market is likely to be a non-starter.
Samma Kitsin, director-general of the Real Estate Information Center (REIC), told the newspaper that the government’s planned transportation improvement projects in Chiang Mai will not be completed for a few years and this means they will have little to no effect on the property market in the short term.
Chiang Mai’s monthly absorption rate for low-rise housing declined by almost two percent y-o-y. There are a total of 159 active low-rise housing projects in the city as of August 2015 with a total of 17,270 units. The monthly absorption rate for condos also dropped in 2015 to 4.9 percent from 7.5 percent recorded in 2014. The best-selling unit type was single bedroom properties priced at THB3-5 million. Single bedroom units priced at THB1-1.5 million also had a decent absorption rate but did not perform as expected.
According to the Bangkok Post, townhouses priced at THB1-1.5 million baht were the best sellers during 2015 with an absorption rate of 20.2 percent per month. Single houses in the same price range as well as townhouses priced at THB2-3 million also performed well.
Tritecha Tangmatitham, managing director of Supalai, believes that some segments in Chiang Mai such as single houses will continue to post solid sales rates. “Single houses and townhouses in many provinces still fared quite well as demand is real. But the condo supply needs time to be absorbed as buyers include speculators as well as investors,” he explained to the Bangkok Post.
However the condo and low-rise property markets in Chiang Mai are not nearly as positive, according to Surachet Kongcheep, associate director of the research department at Colliers International Thailand. He noted, “Some developers needed to buy back or have units returned from buyers who were unable to get a unit transfer. Many of them were speculators who were unable to resell the units due to limited demand while others were unable to get home loans from banks.”
