The real estate market remains at the mercy of COVID-19. The fifth wave to take a grip on Thailand has continued to impact the economy putting buyers in a weak position. Many are delaying buying property while a chunk of investors has vanished from the market entirely, especially foreign investors who have been unable to enter Thailand due to restrictions.
Unsurprisingly, for the first quarter of 2022, the Price Index has decreased with expectations that it will remain stable while the Supply Index has risen as buyers put off buying property. This is according to data collected for the DDproperty Thailand Property Market Report Q1 2022 – Powered by PropertyGuru DataSense Developers have responded to this lacklustre start of the year by offering strategic promotional campaigns to entice buyers and offload their stock. Some even allow buyers to move into the property first before paying instalments.
Despite this stagnant outlook, there are incentives to lure buyers to part with their cash. Transfer ownership fees have been reduced to 0.01% for new and secondhand properties, and the Bank of Thailand has further eased the loan-to-value (LTV) ratio for mortgage lending to allow homebuyers to borrow loans of up to 100%.
Buyers and Investors in a sound financial position and with a long term strategy in mind should take advantage of this and the lower prices.
Districts to Watch
An appetite for locations outside of the CBD continues in the first quarter of the year. Bang Khae districts prove to be the most lucrative (Price Index +9% QoQ) locales due to their vicinity to the Blue Line of the MRT, indicating that the power of the access to the mass transport network is as strong as ever.
Additionally, consumers have continued to set their sights on landed properties, which has a detrimental effect on the condominium market as prices for this property type have decreased. Prices have slumped 1% from the last quarter and 10% year-on-year. At the same time, there has been a 9% hike in demand for landed property.
Prices for single-detached houses have headed upwards, increasing 5% from the last quarter and a healthy 13% year-on-year indicating that developers and sellers are responding to real demand.
Despite a downward trend for lateral living, one point to note is that most condominiums were in the Wattana district, which accounted for 15% of all Bangkok condominium supply. Here space is at a premium due to a scarcity of land, therefore high rise residential schemes are the only feasible solution.
Meanwhile, most townhouse supply was in Klong San district and single-detached houses in Rat Burana district. Both these districts are in Bangkok’s suburbs and not downtown addresses like Wattana, suggesting that buyers are heading out of central Bangkok to capitalise on space as they choose to buy a house in the suburbs rather than a condominium unit.
So while the condominium market has taken a bit of a shunt recently, it will be bolstered by anyone with a desire to live in Bangkok’s CBD to avoid commuting and to enjoy easy access to the city’s attractions. Benefits that landed homes in the suburbs cannot compete with.
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