Research from RHB Thailand noted that investors continue to have concerns about a slowdown in demand as well as potential oversupply problems in Thailand’s property market. There is also a general feeling from investors that the property sector in the country has lost its focus. It was reported that the property market remains weak with the current property stimulus package not having the intended effect in increasing pre-sales.
And while it is hoped that the low valuation found in the property sector may tempt investors to enter once a turnaround appears to be on the horizon, pre-sales have been dire in the first quarter, down 13 percent y-o-y and 23 percent from the previous quarter. Early predictions have the pre-sales figures for this quarter totalling THB41 million. RHB Thailand is also predicting new launches to be down by 30 percent y-o-y during the first half of 2016 with a majority of developers waiting until later this year to unveil new projects.
That is because market sentiment remains weak with investor concerns outweighing any potential positives. Another issue holding up new launches and pre-sales is the fact that developers have been focusing on clearing housing stocks while the stimulus package is still in effect to allow buyers to take advantage of the rate cuts. It is predicted by RHB Thailand that 70 percent of the total project launches this year will take place in the second half.
Some developers like Supalai and Sansiri have bucked the downward trend and recorded y-o-y pre-sales growth. However the outlook was less optimistic for Ananda Development and LPN Development who saw their pre-sales in the first quarter drop sharply by 49 percent and 36 percent respectively when compared to their totals from 2015.
It was also pointed out by RHB Thailand that more competition for mid- to high-end condominium projects along Bangkok’s mass transit routes is coming. This is due to the fact that more developers are planning to come into this segment, which is one of the few still recording healthy take-up rates.
