Despite the easing of the COVID-19 induced lockdown in the third quarter of 2021, signs of an economic slowdown remain. In addition, weak purchasing power still hinders real estate market recovery.
The Price Index of residential property has continually declined and is forecast to remain stagnant throughout 2021. Meanwhile, the Supply Index has steadily increased. Interestingly, supply has risen for horizontal properties, while the number of new vertical properties in the market has decreased as developers and consumers have postponed selling this type of property.
Report Highlights
1. Get The Guru View
2. The Property Market Index
3. Area Focus
4. Conclusion
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Get The Guru View: Key Findings of the PMI Q4 2021
The Property Market Index
Declining real state Price Index
According to the latest DDproperty Thailand Property Market Index report, the Price Index of residential property in Bangkok declined from 183 points to 178 points, or by 2% from the previous quarter (-2% QoQ). This is the lowest point recorded since Q4 2016.
The Price Index for condominiums declined by 2% QoQ and dropped by 11% YoY. Conversely, the Price Index of single-detached houses increased by 6% YoY, while for townhouses, it decreased by 1%.
The Supply Index continues to climb
The Supply Index (the number of residential properties) has increased from 428 points to 458 points, a rate of around 7% QoQ (+10% YoY). Horizontal properties account for much of this rise in supply as the Index for single-detached houses increased by 10% QoQ, while for townhouses, it rose by 8% for the same period. Meanwhile, the Supply Index for condominiums remained stable.
Nevertheless, condominiums accumulated the highest ratio of all residential supply in Bangkok at 86%, while single-detached houses and townhouses accounted for 8% and 6%, respectively.
Area Focus
Conclusion
The Price Index for condominiums shows a downward trend due to economic slowdown affecting the purchasing power of consumers. Condominiums have been hit the hardest due to the diminishing numbers of both domestic and overseas buyers.
Landed properties, especially single-detached houses, paint a more positive picture, which can be attributed to high levels of real demand as people spend more time at home and require more space.
For buyers with strong purchasing power, 2021 is still considered a good time to buy a property, whether to live in or as a long-term investment. Lower prices and other favorable factors such as attractive interest rates, government policies of lower ownership transfer fees, and Bank of Thailand (BoT) relaxing LTV rules for mortgages are cited as reasons for this.
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THAILAND PROPERTY MARKET INDEX Q4 2021
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