As we draw towards the end of the year, there are hopes across the world for a brighter future. The Covid-19 pandemic is now largely under control thanks to a successful vaccine rollout.
However, the pandemic’s blow has caused premature deaths, put pressure on healthcare systems, wreaked havoc across economies and split up families. Coincidentally the recovery of its aftermath will be slow, and for Thailand, the economy is no different.
The Thai property market also hasn’t escaped, and prices for residential property have continued on a downwards trajectory. Forecasts expect a stagnant market into 2022 despite the Kingdom easing lockdown measures. The market is driven by individuals who continue to possess weak purchasing power, as illustrated by the DDproperty Thailand Property Market Index Q4 2021 that revealed that the Price Index for residential property in Bangkok hit its lowest point since the final quarter of 2016.
Given the economic climate, it is not surprising that this lacklustre appetite for property sprees increases supply. In tougher markets, sellers need to work hard to keep the momentum for transactions and be astute to immediate market conditions.
Hence developers were quick to cotton on to the needs of buyers and investors during the pandemic and switched their focus from landed properties like condominiums to vertical ones such as standalone houses or townhouses, as there was a heightened thirst for space.
This vigour for this type of property has increased supply, and for single-detached houses, it rose by 6% year on year. The areas that performed the best are away from the traditional popular Bangkok hubs like Sathon and Sukhumvit, which once took all the glory as the best place to invest in property.
Now districts out of Bangkok’s central core that have risen in the attention stakes are those near recently opened or upcoming mass transit network routes.
Prices in Lat Phrao have increased by 4% over the last quarter, encouraging developers to ramp up supply that has risen by 20% for the same period. While it cannot be ignored that there is significant supply at the lower end of the market for condominium units priced between one and three million baht, for properties over this price, single-detached and townhouses dominate.
Meanwhile, in Sai Mai, supply is concentrated for townhouses priced between one and three million baht, suggesting that it is not only those with deeper pockets who are seeking out vertical rather than landed properties, begging the question of whether Bangkok’s condo bubble has burst.
Stay abreast of the industry’s news and updates sending directly to your inbox, sign up here.