Thailand’s largest developers are set to dominate the country’s real estate market this year due to the fact they can offer lower borrowing costs and have more funding sources, local media reported. During the past few years, the big developers have slowly taken control of more and more market segments.
Prasert Taedullayasatit, president of the Thai Condominium Association (TCA), told the Bangkok Post that large developers were in charge of the market during the first six months of 2016 and this shows no signs of abating. He noted that many of the leading developers now have an interest in every market segment including low-end housing and superluxury projects.
“Some of them will undergo business restructuring in the next six months as the sluggish economy affected the lower-end segment where high household debt was a major problem,” Prasert explained to the newspaper.
By finding lower costs of funding including reduced interests rates from various sources, they were able to invest in land plots in prime locations where prices are the highest. It was noted by the TCA that 50 percent of the new townhouse and condo launches during the first half were by large developers. These developers were also responsible for more than 65 percent of the single-house project launches in the first half.
However, launches were not the main focus of developers during the first six months of 2016 with only 33 percent of those scheduled for this year taking place. A total of 144 new residential projects were launched and these developments are worth THB216 billion combined, according to the newspaper.
In order to avoid flooding the market, developers are being urged to come up with smarter marketing plans that meet demand. This will help them avoid getting into market segments where competition is already high.
“Each location, station or even soi has a different demand. Developers should find it and offer the right product, price and segment to meet their requirements,” Peerapong Jaroon-ek, chief executive of SET-listed Origin Property, pointed out. “Developers should also monitor the market and adjust sales and marketing strategies to keep up with the situation.”
