Sights Are Set Beyond the CBD

The Covid-19 pandemic is taking its toll on Thailand. The second quarter of the year started to record a surge of cases leading to another lockdown in Bangkok, with many people scrambling to get a vaccine. Despite the borders being closed, new variants have become highly transmissible, causing infection rates to soar. Aside from the health impact, the pandemic is negatively influencing the economy, household debt is at an all-time high, and the property market has taken a shunt too.

The appetite for buying property in Bangkok has weakened, decelerating property transactions and decreasing property prices. The DDproperty Thailand Price Index for residential property in Bangkok has slumped to its lowest level since the second quarter of 2017 to 183 points, a decrease of 4% from the previous quarter, indicating the far reach impact of Covid-19.

Rising household debt and a lack of financial security propelled by job uncertainty have put consumers in a weaker position. However, financially sound individuals in a position to buy, have set their sights on seeking a bigger home out of the CBD where space is less of a premium. A common trend in cities across the globe as the pandemic has encouraged people to upsize and move to areas with more availability of space.

For Bangkok, the areas that have aroused the most attention are locations with access to current and future stations of the mass transit lines. Here the Price Index has enjoyed growth, such as Samphanthawong district, where the Price Index rose 22%, bucking the trend seen in the inner city. A similar story for Pom Prap Sattru Phai district as there was an overall Price Index rise of 7% while single-detached houses rose a staggering 45%.

Developers are not naive to this shift in buying habits. Many have focused their attention on creating vertical homes over lateral properties such as condominiums that for a long time have dominated the market.

Initially, this mindset change was driven by the success of the expanding MRT and BTS network, which encouraged people to opt for this means of travel rather than battling the unreliability of traffic on the roads. However, the pandemic forced many people to work from home, causing them to rethink their home setup and incorporating work within this space.

While we are still in the throes of the pandemic, this lifestyle change might be here to stay. Bangkok’s CBDs are already very saturated, with a scarcity of land pushing up prices, so it is not surprising that developers and consumers alike have been looking further afield.