Thailand’s property market has taken what is hoped as only a temporary stall due to the global pandemic. Of course pre existing factors such as the subdued economy and rising household debt haven’t helped the market, but extra strain on consumers weakens their purchasing power giving less appetite to head out on a property shopping spree.
DDproperty Thailand Property Market Index has recorded this downward trend having decreased for six consecutive quarters since the first quarter of 2019. At the same time the appetite for condominiums has lessened, which is a shake up for a property market that some consider relied solely on this property type – maybe in part as condominiums are the one property type that foreigners are allowed to own and this sector of buyers are believed to prop up Thailand’s property market.
However that is not to say that all is not lost since there appears to have been a market shift as investors stray out of the typically popular locales that are both saturated and may have even reached their peak giving little, if no, room for growth.
Bangkok’s central locations were once the only place to buy property. Built to cater for residents working in the central business districts to allow a short commute to work as opposed to an unreliable journey via the road from the suburbs, there still certainly remains a thirst for these addresses. However, the expanding mass transit network now services more than Bangkok and its neighbouring provinces than ever before lessening the need to live right in the centre.
These districts also come at a lower price point making them accessible to a wider pool of people. Plus, typically lower prices mean more room for growth and investors wanting to capitalise on this move in quickly to an area before it is on the up and demand increases simultaneously pushing up prices.
Also other districts have received attention due to their characteristics that differ from the mainstream Sukhumvit, Siam and Silom where some argue that the arrival of chain names have removed the original character of the area. Pom Prap Sattru Phai is the district experiencing the most growth according to research collected in the DDproperty Thailand Property Market Index, having increased by 20 percent.
This district encompasses some of Chinatown which still retains its original charm but also has been the focus of increased attention as independent businesses have moved in with bars, restaurants and galleries popping up to cater for those wanting to seek an alternative to the mainstream.
Other districts have also fared well, and especially so given the subdued nature of the market, are Khanna Yao, Saphan Sung, Lat Krabang and Taling Chan where the median asking price has risen by 4 percent for the first two districts and 3 percent for the latter.
While these are only marginal increases, and more so in comparison to Pom Prap Sattru Phai’s staggering 20 percent, it is not a bad performance when you consider overall the market has taken a bit of a backwards step of late.
The outskirts boast space that central districts cannot compete with enabling them to flourish as they have become the destination for townhouses and single-detached houses. Both have performed better than condominiums having increased 3 and 6 percent over the last two years.
So what does this tell us? Well, firstly those buying purely for investment purposes rather than for their own use, should consider investing out of the city centre. Condominiums do perform well since they are the most sought after property type for tenants thus generating a healthy rental yield, but the sticking point comes to when it is time to sell since prices haven’t increased as much as hoped. Explore new districts, work out the best strategy for your needs and investment and don’t be afraid to dip your toes in somewhere new!
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