The condominium market in Bangkok must be watched cautiously this year, according to Knight Frank Thailand with a number of factors pointing to an uncertainty year. While it is not all doom and gloom, the consultancy’s 2017 outlook points to some risk.
The report explains that purchasing power in Thailand remains subdued as a whole with the income levels of those in new segments of demand not being high enough. Household debt also continues to be high with banks remaining stringent on releasing credit. There was a high volume of loan rejections last year, especially for budget condos outside Bangkok, and it is something that could carry over to 2017. GDP in Thailand is also expected to increase very modestly this year which is another blow to the city’s condo market.
The budget condo market in the outskirts of Bangkok continues to have a high level of risk due to the weakening market conditions. There is also a high supply remaining in the market, especially along the suburban train lines. Moreover, new projects are still being planned to boost development, given that there is still an ample supply of land available for development.
The overall sentiment is that investments in Bangkok’s condo market must be watched cautiously, Knight Frank concludes. The company warns investors to be careful due to all of these factors which could put a damper on market moving forward. However, it is not all bad news for those looking to invest this year in Bangkok’s condo market.
The fringe area of Bangkok is likely to offer good development opportunities, as there is still demand here while supply of available land for development is limited. This means projects launched in these areas have a good chance of achieving high sales and should see prices increase, according to Knight Frank.
