In Q3 2021, the coronavirus pandemic is forecast to worsen due to new variants that allow faster transmission and a lack of access to vaccines. Government lockdown policies also impact the overall economy, leading to fewer property transactions.
The DDproperty Thailand Price Index has continually decreased from the previous quarter while the DDproperty Thailand Property Supply Index has increased as consumers delay their purchase because the pandemic reduced incomes, resulting in weak consumer purchasing power.
Report Highlights
1. Get The Guru View
2. Price Index Overview
3. District Roundup
4. Supply Index Overview
– Property Gets Snapped Up on Account of Depleting Supply
– Segment that Currently Dominates the Market
5. What it means for those hoping to buy/sell in the current market
6. Conclusion
7. Download the report
Read the online report here:
Get The Guru View: Key Findings of the PMI Q3 2021
Price Index Overview
Since the beginning of the year, property prices in Q3 2021 have been sliding due to the recent outbreak. The country’s economy has slowed down, and household debt has hit a record-high when it rose to 90.5% of the country’s GDP.
The latest DDproperty Thailand Property Market Index report indicates that the Price Index for residential property in Bangkok decreased from 190 to 183 points or -4% QoQ, the lowest since Q2 2017.
Districts Analysis
Bangkok’s fringe and outer CBD areas with access to current and future Skytrain routes recorded the highest Price Index growth. Samphanthawong district increased by 22% QoQ, with condominiums experiencing the highest growth at 22%.
Pom Prap Sattru Phai district increased by 7% QoQ, whereas single-detached houses recorded 45% growth.
Thawi Watthana district enjoyed the highest Price Index from the previous quarter at 9%, with single-detached houses recording the highest increase at 7%.
Supply Index Overview
Supply of residential properties ramped up in Q2 2021, reflecting low absorption rates due to limited consumer purchasing power caused by the long period of economic slowdown.
The Supply Index increased from 399 to 428 points or 7% QoQ and 37% YoY, which is the highest jump since Q1 2015. Forecasts expect supply to remain consistent throughout 2021 as developers delay projects and property owners postpone selling.
Condominiums accounted for the highest proportion of all Bangkok supply at 88%, representing a 10% hike from the previous quarter. Single-detached houses accounted for 7% (+7% QoQ) and townhouses 5% (+12% QoQ).
Property Gets Snapped Up on Account of Depleting Supply
The locations in Bangkok with the highest reduction in supply over the last quarter are Bang Mot subdistrict in Thung Khu district, decreasing by 15%; Lam Pla Thio subdistrict in Lat Krabang district and Suriyawong subdistrict in Bangrak district, both decreasing by 13%; Wang Mai subdistrict in Pathumwan district reducing by 5% and Thung Khru subdistrict in Thung Khru district by 4%.
Even though buyer and tenant interest increased in areas where supply has slumped, there are still opportunities for property owners. It is recommended to be diligent in monitoring market fluctuations caused by COVID-19.
Supply for Properties Priced THB1-3 million Dominate the Market
Looking at property supply across price segments, the THB1-3 million segment accounts for the majority with 10% growth. It is followed by the THB3-5 million, THB10-15 million, and over THB15 million segments, all recording 7% growth QoQ.
Condominiums supply in the THB5-10 million segment grew by 5% from the previous quarter, while supply in the THB1-3 million segment rose the highest at 10%. Most supply for single-detached houses are over THB15 million, while most townhouses fell into THB1-3 million bracket.
What it means for those hoping to buy/sell in the current market
For consumers with sufficient purchasing power, 2021 still presents a good opportunity to invest in or buy residential property.
For sellers, it’s important to understand the needs and behaviours of buyers during the pandemic. However, it is recommended that sellers postpone their sales as prices are currently declining
Conclusion
Property prices continue to decline due to the current wave of COVID-19, and the economic slowdown has significantly impacted consumer purchasing power. Developers have even delayed new project launches, especially for condominiums.
It’s worth noting that condominiums account for most oversupply despite developers engaging in price wars and offering promotions to stimulate consumer purchasing.
Furthermore, the high purchasing power of domestic buyers and investors has already been absorbed, creating low supply absorption rates for the remainder of 2021.
Ultimately, regaining the country’s economy rests on supplying suitable vaccines. Vaccines need to be readily available across the country to avoid another lockdown, and as the government attempts to open the country.
Relate Article
THAILAND PROPERTY MARKET REPORT Q3 2021
For more insights and analysis, download the full report here:
If you’re interested in more property insights, check out our prior Property Market Reports
DDproperty Thailand Property Market Index Q2 2021
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DDproperty Thailand Property Market Index Q1 2021
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DDproperty Thailand Property Market Index Q4 2020
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DDproperty Thailand Property Market Index Q3 2019
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DDproperty Thailand Property Market Index Q4 2017
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