Recently there has been a real focus on single-detached houses. Many developers have shifted their strategies to meet the rising demand for this property type over condominiums that are no longer making the gains they once were.

The primary difference between these two investment assets is speculative versus real demand. Typically condominiums are purchased as a place for investors to park their money, rent out to generate an income and to receive capital appreciation when it is time to sell.

Many are bought off-plan in anticipation of making significant returns as the building completes, and often the owner does not reside in the property. On the other hand, single-detached houses are for owner-occupiers illustrating how they represent real demand.

DDproperty Thailand Property Market Index Q3 2020 identified three places outside of Bangkok to watch single-detached house price growth. These are Chon Buri, Samut Prakan and Pathum Thani.

The highest growth was found in Chon Buri having risen 13 percent year-on-year making it one of the high-potential provinces in Thailand. Its location next to the sea as a popular beach destination explains the increased appetite for the area.

However, Chon Buri also fits within the Eastern Economic Corridor thanks to its thriving industrial estates providing employment explaining why the government has earmarked it for growth. This includes several infrastructure developments including a high-speed train, road network improvements and attention to developing piers. These have already had a positive impact on the area resulting in the province’s increased demand and prices.

Samut Prakan has gained momentum due to the BTS Skytrain network’s extension into this province providing a quick and efficient means to access Bangkok’s central business districts. This has weakened the need for a weekday city bolthole rather than battle the unreliable traffic on the road explaining why condominiums have become less appealing. Plus its vicinity to Suvarnabhumi Airport has been a real draw too.

Here the median asking price has risen 4 percent year-on-year, although Bang Bo Do District within the province has risen a staggering 15 percent demonstrating the sheer interest and demand for a single-detached house here. In turn, Samut Prakan supply has increased by 38 percent year-on-year, with over half within Bang Phli District and 28 percent in Mueang Samut Prakan.

Lastly, Pathum Thani has enjoyed 3 percent growth over the last year. Housing projects have arrived in gusto as its location just north of Bangkok is primed for access to the capital thanks to the arrival of two mass transit lines. Additionally, there are various public and private investments in the pipeline of this Greater Bangkok province helping drive demand where the supply of single-detached houses has increased 31 percent.

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PropertyGuru’s Property Sentiment Index H2 2020 collects opinions from property investors in Indonesia, Malaysia, Singapore and Thailand to determine the current mood of the real estate market. Its purpose is to help consumers and property agents identify the mechanics of their local market, which in turn helps them to flourish.

The data revealed that Bangkok continues to be the key focus for investors in Thailand. Typically capital cities secure this accolade since they are the melting pot of employment drawing in people seeking opportunities and putting pressure on housing.

However, the area within Bangkok that aroused the most demand is Outer Bangkok consisting of Ratchada, Ladprao and Rama 9. Here prices are more affordable without losing out on access to Bangkok’s efficient and reliable mass transit network.

The Lure Of Rama 9

Chiangmai was the next area of interest for investors in Thailand, followed by further Bangkok suburbs mainly around Sukhumvit that relish on access to the Light Green Line of the BTS Skytrain network.

Property for Sale in Chiang Mai

It is a similar story in Indonesia. Jakarta is the most popular place to invest in property with a strong preference for South Jakarta, followed by comparable demand for the East and West suburbs, then Central Jakarta and finally North Jakarta.

Likewise for Malaysia, Klang Valley that centres around Kuala Lumpur saw the highest amount of interest. The appetite of Malaysian investors is fairly evenly across Petaling Jaya, Damansara, Subang Jaya and KL City Centre. A similar spread is found in Singaporean suburbs however, this is not surprising since this tiny island state has a small surface area leaving little land to choose from.

Generalising, Southeast Asia has a thirst for newness including properties too. While it helps to drive the market and developers to launch new projects, it does create an oversupply of property and also leave a lot of vacant and depreciating second hand stock. The report affirms this as most respondents of the survey sought out new over older properties, especially in Malaysia. 

Singapore was the only place where the respondents were more open to the type of property with a relatively even spread between new, resale stock and even HBD flats. This demonstrates Singapore’s sophisticated market that is also driven by a lack of supply giving investors little choice than to be more open in their buying choices.

This flexible attitude is reflected elsewhere in the report as it revealed that the majority of Singaporeans would consider buying a property by auction, a sentiment shared by Thai investors too.

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Yes! This is according to the PropertyGuru’s Property Sentiment Index H2 2020, which collaborates opinions to grasp perceptions on the state of play of Thailand’s real estate market. 

The most notable fact collected from this research is that 43 per cent of non-property owners plan to rent a property in the next year illustrating the sheer strength of the lettings market. Of this group, the majority do not have any plans on how long they intend to rent for, while 38 per cent have plans to buy property in two years. 

So what is stopping these renters from making a property purchase? The main reason cited was a lack of funds – a sentiment shared across all age groups proving that rental properties provide a service for those unable to afford to get onto the property ladder. The top next three reasons for remaining as a property renter rather than owner held equal strength amongst the respondents.

These were that they would rather spend their money than save to own a property, that the property market is currently unstable with values depreciating and that the government regulations do not make it easy for first-time buyers to enter the market. 

These reasons are diverse with no simple solution to fix all, but they do provide confidence to landlords who own property to generate an income stream. These landlords should also note that one-bedroom units are most in-demand, suggesting that people want to live on their own or with a partner as opposed to residing with friends. Renters also expect to pay THB 6,645 a month in rent, which landlords should factor this in when looking for a suitable investment property.

Renters prioritise location to their office suggesting the need for rental units to be within the city’s central business districts, however, could this change with the arrival of COVID-19? It could go one of two ways.

Either renters now have more flexibility and might no longer need to head into the office as regularly as before, or some renters might want to remain close to the office for fear of catching the virus whilst commuting to work on public transportation.

The next two most important concerns for tenants when looking for a property relate to the property location, with security and maturity of the area being of utmost concern.

Picking the Perfect Rental Property

Turning to landlords, the vast majority understand the importance of a tenancy agreement when renting out their property. Good news for both tenants and landlords alike as a tenancy agreement stipulates the obligations of parties on both sides to avoid any disputes later down the line.

Lastly, landlords remain happy to rent to foreigners. This helps this segment of the market who are not in a position to buy due to only being in Thailand for a short period, do not qualify to invest, would rather rent or do not have sufficient funds.

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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.

Property for Sale in Pom Prap Sattru Phai

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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COVID-19 is proving to have a long-lasting impact on a global scale. Some industries such as tourism were immediately hit in response to closed borders or people ceasing to travel, while other sectors will feel the pain later down the line. Inevitably countries hit hard will have a significant economic impact resulting in less tax revenue and money to reinvest in the country.

Property is often cited as a safe investment asset because everyone needs somewhere to live as opposed to a speculative asset. However, it becomes less lucrative when there is market oversupply driving prices down.

How COVID-19 Is Impacting The Property Market

One of the first impacts in Thailand with the arrival of COVID-19 was the lack of tourists and overseas investors that chose the Kingdom as their property investment destination thanks to its attractive price point compared to on home soil. Their lack of presence in the market has weakened demand and softened prices. 

Domestic investors have also been deterred to part with their cash due to the global pandemic illustrated by DDproperty’s Thailand Consumer Sentiment Study that revealed that more than three in five Thai investors are hesitant to make a property investment now.

Thailand’s economy, like many other countries, has suffered from the pandemic due to people losing their jobs or incurring a salary reduction. This lack of security naturally encourages individuals to put their property purchase on the back burner until they are in a better financial position. Also, no one really knows the long term impact the pandemic will have on a global scale so many investors will want to see how it plays out.

COVID-19: Another Cog Impacting The Thai Property Market

At the other end of the spectrum, 15 percent of those interviewed have seen the outbreak as a good opportunity to invest. Many developers are desperately trying to offload inventory resulting in an abundance of offers and promotions to lure investors. Astute investors eye up weaker market conditions in the hope of making greater gains in the future. Developers should capitalise on these investors and secure them into purchasing their property. 

Simultaneously since many people are now working from home, there is a real thirst for more living space. Many companies have identified that they can function without having their employees permanently in the office meaning that they might never go back to being based in the office full time.

Investors are taking note of these changing habits when looking for a property to buy whether it is for an investment or for themselves. Developers also need to adapt, and those Bangkok condominiums packed with lots of small units might become a thing of the past if demand weakens in favour of units with sufficient working from home space.

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No one could have predicted the impact a virus could have on such a global scale and what role it would play in Thailand’s residential property market.

Recent data collected from DDproperty has gauged how COVID-19 has reduced property prices and forced developers to rethink their strategies.

As with any economic downturn, property prices have naturally taken a dip. An immediate reaction created due to economic uncertainty and individuals lacking job security and the ability to secure a home loan. However, before the outbreak, the property market already faced challenges due to high household debts and a subdued economy. The arrival of the virus has become another hurdle to overcome.

The DDproperty Thailand Property Market Index saw Bangkok’s price index reduce by 4% for the third quarter of 2020. Simultaneously, the supply index dropped 15% influencing individuals looking to invest in Thai property as well as developers who have become wary of market conditions.

Historically developer strategies in Bangkok have focused on condominium projects that were considered the most lucrative and safe form of investment. There has however been a shift over the last year driven by consumers who have seen the merit in Bangkok’s ever-increasing mass transit network and the realisation that a central bolthole is no longer.

Coincidentally developers started focusing their efforts on building landed residential properties in suburban areas and provinces to capitalise on real rather than speculative demand.

The arrival of COVID-19 led to employees abruptly working from home to adhere to social distancing. Living, working and playing all within one space amplified the need for homes with more space to accommodate this and weakened the demand further for condominiums.

Developers have concentrated efforts on shifting their backlog of unsold inventory before considering launching new projects and stock resulting in a market awash with promotions and offers in a bid to generate interest. Plus, as day-to-day life has become more virtual, there has been an increased use of online platforms to market and sell properties.

“Developers continue to concentrate on clearing inventory with attractive promotions to stimulate consumers, especially for condominiums. This has resulted in lower condominium prices, a trend we expect to see until the end of the year,” said Kamolpat Swaengkit, Country Manager of DDproperty.

As mentioned property prices are forecast to continue on a downwards trajectory until life returns to the new norm, and the economy shows signs of recovery. To top this off Thailand’s borders remain firmly closed restricting overseas investors who some state prop up the condominium market.

But this does create a window of opportunity for investors remaining in stable financial positions. The abundance of choice, price wars between developers and ongoing promotions lead to lower prices that astute investors are keen to capitalise on.

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COVID-19 impact is far-reaching. Aside from the obvious healthcare concerns it has raised, it has defined a ‘new norm’ and has battered economies and livelihoods globally. Nearly all industries have been affected one way or another, including Thailand’s property market.

Research collected by Thailand Consumer Sentiment Study in a recent study, ‘The COVID-19 Situation Affecting Property-Related Decisions’ has revealed the impact the virus has ensued on the Thai property market stating that three in four Thais have delayed their property purchase as a direct result of the pandemic.

A viewpoint shared across all age groups signifying the biggest concern the virus has raised. Additionally, a third have faced issues with securing a home loan that is likely caused by weaker job security and less funding for a deposit.

Interestingly respondents from the study felt that they were well informed about the outbreak with very few citing the inability to attain sufficient information that could influence their buying decision. This indicates how well connected we are as individuals and societies to share information and on a real-time basis.

The study reinforces this notion as it concludes that three out of four Thais use social media and property portals to source information relating to the property market, a significant shift from when property agents were the sole providers in relaying market news.

However, property agents are still the eyes and ears of the real estate market and their knowledge and experience are required as content for social media platforms, blogs, and online articles even though readers might not necessarily be aware of this.

Social media platforms do allow users to access individual experiences and viewpoints that might be glossed over in marketing collateral. There is a real desire for raw material and content and not just images that are edited and filtered. Users are increasingly aware of such techniques that do not fool them when forming an opinion or making a decision.

One respondent in their thirties stated that they would look for a property online and visit the brand website to gather further information suggesting the importance and accessibility of information.

This stresses how developers need to invest in their brand and marketing to lure in investors who previously would have visited the site first as part of their research strategy but no longer do so due to the pandemic.

Lastly, the younger demographic of Thais has said that they are most likely to discount properties in COVID-19 infected areas suggesting that the pandemic has not entirely deterred their property search.

Likewise, while the vast majority are hesitant to dabble in the property market at such an uncertain time, 15% consider this as a good time to make a property purchase capitalising on developer offers and promotions that have been introduced to help boost sales.

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Society is adhering to a new normal in the wake of COVID-19. Social distancing, wearing a face mask, and a heightened sense of cleaning form part of this. Industries, including hotels, are adapting their functionality for the protection of their employees and customers.

International travel has temporarily come to a halt as some countries have closed their borders and governments have discouraged travel. But in recent weeks Europe has opened air bridges permitting passengers to arrive from certain countries without quarantine in a bid to not miss out on the lucrative summer tourism trade.

In 2019 tourism accounted for approximately 20 percent of the Thai economy. Closing the Kingdom’s borders has had a significant impact on many tourism associated businesses and livelihoods as noted by Mr.Atakawee Choosang, Head of Capital Market at CBRE Hotels Thailand. Many hotels have had little choice than to close their doors as keeping them open is unprofitable despite the increased appetite for domestic travel.

Many hotels are taking steps during their closure to improve safety precautions and to provide guests with trust that the hotel is virus-free. Choosang believes that this is a positive development for the industry identifying the already changes in hotel-dining.

He states, “Guests are now more conscious about social distancing and virus infection from food-on-display. It is possible that for the hotel F&B segment, less emphasis will be placed on all-you-can-eat buffets in favour of á-la-carte, set menu, and chef table courses. If done well and creatively, this could result in decreased food waste and higher quality food.”

Thailand has proved to handle the COVID-19 pandemic exceptionally well, an accolade the tourism sector can advantage from. Focus has also turned to medical tourism, and the government is mulling opening the borders for medical tourists. Hotels can capitalise on this sector working with travel agencies and hospitals to generate business to help the hotel sector on the road to recovery.

Another part of the new normal adopted by hotels is to facilitate touchless operations to minimise the transfer of germs. This might completely alter the hotel dynamic as identified by Choosang.

“However full-scale touchless technology, digital keys, digital check-in, and potentially ultraviolet and other unobtrusive virus-killing technologies could become the norm at branded and upscale to luxury hotels. The adoption of phone booths for individual calls should become more prevalent, however, it is to be seen if a reversion away from a communal approach to hotel design will be embraced since the community aspect is very much part of ‘lifestyle’ hotels which has become popular over the past several years.”

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As global temperatures rise and the threat of climate change heightens, sustainability and carbon-neutral have become buzz words. Individuals and companies are taking actions to help combat the ever-growing threat that global climate change poses and the arrival of COVID puts a new slant on this topic.

Half of the world population has lived in cities since 2007 and by 2050 is predicted to rise to 75 percent. Rising urbanisation has put increased pressure on city centres as living and working become more concentrated, which is contrary to the recent need to adhere to social distancing to slow down and halt the spread of the virus.

How has COVID-19 impacted property prices and where are the opportunities?

During PropertyGuru’s recent webinar, ‘Exploring Efficient Design’, James Pomeroy, Founding Principal at Pomeroy Studio and Pomeroy Academy questioned how to build for the future. He pointed at building onto the water to satisfy urban living since two-thirds of the earth’s surface is covered in water.

Reclaiming land has already been a practice in Singapore to meet demand in this tiny city-state much like Monaco where a project to build onto the sea will help accommodate the growing population and desire to live in this small tax haven.

However, in creating more space to live, Pomeroy stressed that future buildings should not only be carbon neutral but carbon negative to produce power to pass back to the grid. Building onto the water could also generate energy utilising the water’s power to help reduce city greenhouse gas emissions that account for 70 percent despite cities only covering two percent of the land area.

Also attending the webinar was Ron Bakker, Founding Partner, PLP Architecture. Bakker’s thirst for urban development has led him to explore the option of the building using sustainable materials like timber.

Appearing unsuitable for hot and humid climates in Southeast Asia that are prone to termites, Bakker suggested encasing it in glass to lengthen its life illustrating its endless opportunities and durability. Bakker has a real appetite for wood and is exploring the option of creating high rise structures with this material that has better environmental qualities than cement and steel.

Following in a similar vein, the final panelist, Wenhui Lim, Partner at Spark Architects, proposed that future efficiency should be driven by transforming buildings rather than knocking down and rebuilding.

This common practice in old cities such as London protects buildings of historic significance where altering the look is restricted. Retrofitting helps bridge this gap without consuming more precious resources.

This practice forms part of the circular economy emphasising reusing materials much like Bakker’s suggestion that buildings should have more than one use to maximise efficiency. For example, a coffee shop by day and a wine bar by night.

Plus with more employees working from home due to the recent global pandemic, many offices are increasingly inefficient. We should look at ways to maximise their use, giving us more food for thought about how we tackle living in an ever-increasing urban world.

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DDproperty’s Thailand Consumer Sentiment Study, revealed that across all age groups, the perception of property agents and developers is the least important factor when considering a property purchase.

How Thais perceives the property market is key to its success. Confidence buoys demand to instigate spending and increase transaction numbers. The property market is driven by supply and demand, and achieving the right balance makes the difference between a buoyant and lacklustre market. 

Real estate agents work on commission so just like any other salesperson, part of their job is to talk up the market to increase sales and take-up rates. However, DDproperty’s Thailand Consumer Sentiment Study, revealed that across all age groups, the perception of property agents and developers is the least important factor when considering a property purchase. Therefore to gain the perspective of individuals paints a clear forecast of the property market to predict future trends and scenarios.

Of those interviewed for the report, more than 75 percent plan to buy property in Thailand with over half of these hoping to do so in the next two years. This alone suggests a certain level of confidence in the market. There remains however a real appetite for new properties with the majority of Thais setting their sights on this type of property suggesting that developers need to keep building.

Carrying out Due Diligence on the Developer

Sustainability has become a buzz word as people are changing their habits to reflect more environmentally friendly living. This notion continues with looking for a new home as 81 percent of respondents stated that they would be prepared to pay more for a property that is an environmentally sustainable home, something that developers should take heed of to generate interest in their product and to even boost profits. 

Advantages of a new home

While foreign investors are often cited as driving Thailand’s market, Thais have said that they are in favour of restricting foreign ownership for local citizens to advantage. Foreigners are allowed to own condominiums but only up to 49 percent of the total saleable area of each building.

Typically Thailand welcomes investors from Japan, Singapore, Hong Kong, and China buying units to park their money while enjoying the capital appreciation it brings. However, should new legislation be introduced to restrict their numbers, it will naturally increase supply and inturn reduce property values.

Any such measures would need to be carefully thought out and introduced slowly to minimise the impact on the wider property market and the country’s economy.

In conclusion, Thais continue to see bricks and mortar as a wise investment asset. Their thirst for new properties will ensure take-up rates for newly launched projects will remain strong, however, at the same time, this will devalue resale properties and is a large mindset to be overcome in the future.

Finally, developers should consider including sustainable features when designing new projects to gain traction and to keep up with competitors.

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The DDproperty’s Thailand Consumer Sentiment Study reveals that the respondents see outer Bangkok as being the most popular place for property in the future.

Bangkok has developed into Thailand’s main property hub as it is at the centre for business including manufacturing, one of the key drivers for the economy, including Japanese firms keen to take advantage of the Kingdom’s low operational costs.

Consequently, it is where the majority of employment opportunities lie drawing in people who all need a roof over their heads. It is also the base for the country’s leading educational institutions in particular universities that contribute to the city’s growing population. 

To meet this demand housing was built upwards in the form of condominiums and apartment blocks with people moving from standalone houses that require regular upkeep to vertical living with easy management and shared amenities.

Typically central business districts were earmarked for development to give residents ease of access to their workplaces and local amenities rather than battling the city’s notorious traffic. However, the arrival and expansion of the city’s mass transit network saw condominiums out of these central cores. 

Established in 1999 as initially just the BTS Skytrain, over the years the network has expanded considerably to include the MRT that now nearly dominates the network. This form of public transportation now travels into neighbouring provinces including Samut Prakan and Nonthaburi illustrating the distance it is now possible to travel in and around Bangkok that has also opened up new areas that were once hard and timely to reach.

The DDproperty’s Thailand Consumer Sentiment Study assesses the perception of property in Thailand across a broad age range from 22 to over 60 years old interviewing various demographics from single people, those in a relationship and married, widowed people and those with families.

The merits of buying near to an already popular area

Data from the report reveals that the respondents see outer Bangkok as being the most popular place for property in the future. This sentiment was echoed across all age groups, in particular, those in the 40 to 49 years age bracket, indicating a shift in attention from traditional sought after Bangkok locations such as Sukhumvit and Silom to newer areas.

The second most popular locale expected to be Bangkok’s future up and coming area are labelled as Ratchada/Ladprao/Rama 9. These neighbourhoods have spiralled over the years as Rama 9 has developed into a new central business district where companies benefit from the availability of land, cheaper rents, and newer modern commercial spaces. Additionally, the Blue Line of the MRT network that travels in a complete circle of Bangkok travels through these areas highlighting its accessibility. 

The next area respondents would consider is Mid-Inner Sukhumvit that includes Phrakanong/On Nut and Udom Suk and then Outer Sukhumvit spanning Bangna/Bearing. This illustrates a complete shift in attitudes and perceptions where Bangkok people are looking to buy and rent property from historic popular locales including in and around Asoke and also Silom.

It also demonstrates the success of the mass transit network in shaping how people live and in turn the property market. Developers have been quick to cotton onto this building new condominiums and single houses to satisfy the demand that has helped expand Bangkok’s property market in terms of property type, location, and price to create new pockets of upcoming areas.

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Premier industry experts also share an overview of the first quarter of the year, as well as brief market forecasts.

The world as we know it doesn’t have a playbook handy for the pandemic, which is why policymaking around the globe has gone into overdrive, revealed the co-managing partner at BDO Thailand Paul Ashburn at the Asia Real Estate Reboot webinar last 30th of April.

To address the public health crisis and assist its citizens, local governments across affected countries have been approving stimulus packages for at least three times. As a result, Paul said that “it had a very abrupt impact in the space of a few months on the world economy as businesses closed down, people started working from home, authorities mandated travel restrictions, and so on.”

Since everyone is still uncertain about the impact of the pandemic on the world economy, most fear the coming of a deep global recession.

In response to this, Lloyd Lee, the managing partner at YOO Capital who was also a speaker at the Asia Real Estate Reboot, said that their investment firm has already noticed investors clutching on to safety nets.

“If you look throughout the inquiries that you’re getting in Asia, it would not surprise me to find out that Singapore is one of those markets that is probably getting more inquiries today than other markets, which are considered emerging,” he presumed.

According to him, investors these days are, unsurprisingly, looking for countries with fewer risks. “They are not looking for excessive returns, they are really looking to preserve capital, create yield and benefit and not feel like they’re taking undue risk in an uncertain market.”

To guide investors in their decision-making process, he shared with us four aspects to focus on to identify opportunities post-COVID-19 outbreak:

1. Real estate fundamentals

Investors must learn to separate real estate fundamentals from COVID-specific fundamentals, particularly since this downturn was not caused by a real estate component, banking or others, but by a biological factor.

“We need to make sure that we figure out what we think is going to happen with COVID-19 not just today, not just tomorrow, but over the medium term. We also have to remember that in the end, we’re all investors and investors have to invest based on fundamentals,” explained Lloyd.

Recently, their firm has witnessed investors base their decisions with what has happened in the last 60 to 90 days. Most of them have resorted back to the day trading mentality where they question if they can get back into the investment market, if the economy is already under recession, if the prices have gone down or if they have gone up, or if there will be a J-curve recovery.

However, he said that they have begun to overlook the fundamentals, which questions how the demand or supply is, what are the interest rates or what people are feeling about the underlying risk of a downturn knowing that thousands or millions of businesses across the globe might be permanently shut down in 90 days.

“We need to understand the financial and actual fundamental impact by looking at the actual recession itself and what that starts to look like in terms of occupational demand,” he added.

2. Recovery curve

Investors must learn to acknowledge the recovery curve since historical events that have substantially affected the global economy could give them a clue on what they should be looking forward to. Even though every downturn and recovery are different, there are still some basic elements to watch out for.

Lloyd suggests checking where the interest rates are at, where is the unemployment, where the actual occupational demand is coming from and how that balances against existing supply. By concentrating on these areas, you will be able to get a clear picture of the recovery curve.

“You [will be able to] understand how much real estate is actually available out there and what you think the demand generators look like as they start to recover through the recession. For us, that is a particularly important part of the real estate fundamental analysis,” he added.

More: Coronavirus outbreak to further disrupt property investment sales in Thailand in 2020

3. Capital deployment

The short-, medium- and long-term priorities for capital deployment is another aspect that investors must focus on. This will be quite personal to any investor since they should be asking themselves what their priorities are, if they consider themselves as a long term investor who is looking for long term yield and not just upside, or if they are searching for opportunities where they will be driving upside and moving on repositioned assets to other long term investors.

This one is crucial because they must look carefully at their hold period, particularly since they are investing during a downturn. “Generally speaking, you have to be prepared to hold things longer because you don’t know exactly how long the recovery curve is going to be,” said Lloyd.

4. Capital structure

As an investor, he said that you must also look for a stable capital structure since “one of the things that almost always happens in a downturn is that banks ease lending or they make lending very favourable to themselves. This means that they will give you short term lending or bridge financing and are not taking the long term risk with you.”

“What we found can happen to certain investors is they borrow short and buy long. If the recovery doesn’t happen the way they think, they owe the bank the money and they haven’t actually exited the asset yet, or the asset hasn’t actually reached maturity yet – and you can get caught by that kind of thing. So creating a very stable fixed-rate capital structure is very, very important in these very, very extreme inflection points.”

More: Data centres prove to be a profitable investment in developing countries

Market forecast

For the next couple of years, Paul shared some predictions that countries in the region could implement to restabilise their economy. He said that in the recovery phase, we will be seeing more fiscal stimulus and tax relief measures. Essentially, countries will do whatever they can to get the economy back on track.

They will also be establishing tax incentives to encourage developers to shift inventory and to make real estate more cost-effective in this subdued market since there is a strong indication that investment and housing have a strong multiplier effect for the economy.

Moreover, local authorities will be relaxing restrictions on foreign investments, and there will be more collaboration with ASEAN and its close neighbours.

With these predictions in mind, Lloyd advised investors who are trying to figure out opportunities to get more returns to focus on the core markets in the next 12 to 24 months.

Within these markets, he said that you can search for any potential where you can transform value at the asset level. The idea is to choose a market that you think will offer higher levels of liquidity in the near to medium term.

This article was first published on AsiaPropertyAwards.com

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Industry leaders discuss the vital role of technology, as well as the impact of COVID-19 on both developers and consumers.

The COVID-19 pandemic, which currently wreaks havoc across the world, has driven countless businesses and tourist destinations to close, has mandated 2.6 billion people (or a third of the global population) to observe lockdown protocols, has pushed 25 million individuals to the brink of unemployment and has led to global economic uncertainty.

Real estate is among the industries heavily affected by the outbreak. The construction of property developments are now delayed, on-site sales are prohibited or minimised, investors are more cautious, tenants operating non-essential businesses are facing financial issues and much much more.

So how is each sector doing?

Across the Asia Pacific, Invesco revealed that the logistics sector will be somewhat more resilient as they are backed by the growing B2C e-commerce activity. Companies will be more open to the use of widespread technology, but the supply chain will be obstructed because of the suspension of manufacturing processes and the rapid decline of road, rail and air traffic.

The pandemic will have minimal impact on the residential sector in Australia and Japan as opposed to other countries in the region. In Singapore, Hong Kong and China, consumers will delay household investments.

As for the retail sector, the founder of design brand YOO Worldwide John Hitchcox said that “technology has really changed the game” as its usage has been sped up by the lockdown. At the Asia Real Estate Reboot webinar last 30th of April, he said that they are getting around 400 Amazon deliveries per day in London because most of the population has now embraced online shopping.

“I think retail is going to become much, much more of an experience, which is where it was heading anyway and this is just going to accelerate the process,” he added.

Meanwhile, John said that offices, which has been operating based on the Live Work concept for 10 years or so, will be going through “a full demonstration of all the opportunities, and all of the advantages and disadvantages of [the concept] and I think that’s going to be much more acceptable.”

“We’ve all learned these words like Zoom, and how to conference and work, and we’ve definitely noticed it in our office. The level of productivity has been very good, if not better, than normal and in some cases, creativity seems to be good.”

However, that doesn’t mean the end for the office sector in the future. John said that there will be a need for offices since there are still employees who prefer to separate their home from their work. This time around though, employers will realise that it’s not always essential.

On the other hand, Bill Barnett, the managing director at C9 Hotelworks who was also a speaker at the Asia Real Estate Reboot, said that branded residences will be an exciting space. “Technology is certainly going to accelerate the space and I think when we look at transactions, be it COVID-19 related or something else, people will want a hands-off approach.”

“We think the entire transaction eventually with big data, will go online – and that’s certainly gonna be a big outcome from the outbreak.”

The accelerated use of technology will certainly help out this sector because by 2025, Bill revealed that 79 new branded residences projects, with more than 16,130 units in Asia in the upscale through luxury tiers will be added to inventory.

More: Hotel branded residences to emerge as Class A real estate in Asia

Developers turn to technology

Sharing the same sentiment as John and Bill in terms of the abrupt use of technology in the industry is Jeremy Williams, the chief business officer at Singapore proptech company PropertyGuru Group and one of the speakers at the Asia Real Estate Reboot.

He said that one of the key trends that the outbreak will encourage in Southeast Asia is the developers’ adoption of digital products. Most of PropertyGuru’s clients have already employed virtual solutions, such as sponsored digital content engagement, online launches, social media video posts, online booking, virtual tours and Zoom conferences.

For instance, he shared that the online launch of a small project in Singapore resulted in sales of 77 units over one weekend. “We don’t believe physical launches will go away, but we do see a world where developers will launch both digitally and physically simultaneously,” clarified Jeremy.

The proptech company has also introduced their own solutions to support developers, namely FastKey that automates project sales cycle from launch to close of sales; FastKey Storyteller, which is linked to a CRM and booking engine, that enables developers to create a digital show suite to allow remote viewings; virtual property shows and live stream sessions to connect Chinese agents with developers; and thought leadership webinars to educate developers with data, insights and market outlook.

More: Property developers in Singapore rely on technology to safely market projects

Shift in consumers’ buying behaviour

Unsurprisingly, property searches among consumers have declined amid the pandemic. Jeremy said that the number of inquiries they received across the market was varied, but the decline has stabilised a week after the announcement of the lockdown.

“We are currently seeing a week over week growth of about three percent in traffic and six percent in leads, which does indicate some strong underlying demand.”

The proptech company has also witnessed a 93 percent boost in consumer traffic for Southeast Asian properties coming out of China. Before the outbreak, the Chinese were very already active in the region’s property market. In Bangkok, for one, they represent up to 15 percent of primary or new home purchases.

“Given the search volumes we’re seeing, we do expect Chinese interest in Southeast Asia to increase from previous years,” shared Jeremy.

As property consumers get used to technology as they deal with life in isolation, developers must learn to take advantage of this and provide them with an immersive viewing experience from the comfort and safety of their homes.

This article was first published on AsiaPropertyAwards.com

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The recent global outbreak of COVID-19 has affected all business types and has played a role in Thailand’s stagnating property market.

DDproperty Thailand Property Market Index assesses market conditions for the first quarter of 2020 noting that it has not significantly altered since the end of 2019 and is still at the mercy of economic challenges but is also suffering further from the global pandemic.

DDproperty’s Price Index has been continually shrinking since the beginning of 2019 and has continued on this trajectory for the first three months of this year reaching its lowest level since Q4 2017. The economic slowdown and high household debts remain at the forefront for this decline also forcing developers into a corner making it impossible to increase prices.

The introduction by the Bank of Thailand of stricter loan-to-value regulations has also weakened purchasing power and has contributed to declining condominium prices having shrunk by six percent over the last year. Developers have continued in gusto with strategies to dispose of their inventory running promotional campaigns and luring in buyers with attractive discounts.

The biggest impact COVID-19 is imposing on Thailand’s property market is the restriction of foreigners entering the country thus lessening the number of overseas investors. In 2019 Chinese nationals accounted for THB 28 billion of ownership transfers suggesting the sheer importance of this demographic. The market could suffer further without this injection particularly as other areas of the country’s economy have dampened, such as tourism and exports.

Developers will take heed of these challenges and will tackle supply by delaying new launches while concentrating on clearing any unsold inventory. This trend is confirmed by the report that revealed an eight percent decrease in supply since the third quarter of 2019 with all property types subject to this decline including townhouses which decreased for the first-ever time since the end of 2017.

Fortunately, Thailand has taken appropriate measures to overcome the pandemic. This combined with China now coming out of lockdown, there is hope that the opening of borders is on the horizon bringing with it more Chinese nationals looking to continue their property spending spree in Thailand. The country’s low property prices, high quality of living, and a good level of healthcare remain attractive factors to maintain the appeal and keep the momentum going.

Breathing Space At Home

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Millennials have a reputation for desiring flexibility within their social and work lives and wanting to climb the career ladder quickly.

Categorised as those born between the mid-1990s to early 2000s, it might be assumed that this demographic is not too interested in settling down and locking themselves into a long term investment like owning a property. DDproperty’s Thailand Consumer Sentiment Study illustrates how this is not the case.

The Benefits of Buying Young

The report assessed how people in Thailand invest in property to discover where their priorities lie and looked at different age categories to identify contrasting habits.

Social media is often cited as an alternative search engine and so the first point that was highlighted, and that comes as no surprise, is that millennials maximise these platforms when looking for the property thus emphasising the importance of developers investing in their various channels.

Data collected from the report illustrated that one in five millennials live with their parents, with the majority of this segment being single. While this age group is often labelled for their love of flexibility, the report revealed that over half of the respondents have a monthly saving strategy in place to reach homeownership status.

This suggests their aspiration to own bricks and mortar, which is in line with their thirst to succeed such as within the workplace. In fact, over 90 percent of millennials want to buy property rather than rent indicating their switched-on mentality and understanding of long term investments.

The merits of buying near to an already popular area

Additionally, the vast majority of millennials prioritise their money to save for a home rather than using their hard-earned cash to spend on hobbies or to go to concerts.

Finally, when looking for a property to buy or rent, millennials are most concerned with location. This was the number one concern across all age groups again suggesting that millennials have a good grasp of the property market and what makes it tick.

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It was impossible to predict how COVID-19 would impact the world across virtually all countries and businesses in such a short space of time. Some changes were immediate while others will have long-lasting effects that are forecast to change various habits.

Its rapid spread across the world demonstrates the strength of globalisation forcing some governments to enforce lockdown to keep people at home and to restrict the virus traveling further.

One of the quickest changes to occur was working from home as a result of self-isolating and social distancing. Employees set up their office at home relying on technology to conduct business as usual and to stay connected to their team and clients.

Simultaneously online shopping sales were boasted including takeaway food services that escalated further with the Thai Government closing all shopping outlets except essentials such as food and medical suppliers, and only allowing restaurants to operate a takeaway system. 

People are spending more time at home than ever before thinking of innovative ways to go about their everyday life without stepping outside of their doors. For some it is mentally hard to get through the day without a change of scenery and attention has been turned to home improvements.

After all, if we are all stuck at home, why not make the most of the space around us especially as we are welcoming people into our home through virtual meetings that might not have come inside before. 

The property market in the short term will be impacted by fewer transactions as investors halt their property search or as tenants extend their tenancy should they no longer be able to move. Real estate agents will implement creative measures to keep the industry going such as virtual viewings through videos that might even catch for the long term long after COVID-19 has passed. 

However, looking to the long term, buyers and tenants are expected to strive for their homes to have sufficient space and within that, personal space. Working, relaxing, eating, sleeping, and even exercising in one area can be taxing on the healthiest of minds.

The DDproperty’s Thailand Consumer Sentiment Study, which was carried out pre-COVID-19 revealed the importance of needing more personal space amongst buyers and tenants. It was classed as the most important factor when choosing a new home even above location suggesting its importance before the sudden change in living arrangements as a result of the global pandemic. 

Bangkok is renowned for offering a wide range of accommodation from budget to luxury with the lower end appealing to tenants who want to live on their own. However, much of this type of accommodation is within a single room or studio style as many residents, until now, only sleep at home while spending the day working, socialising and eating elsewhere.

While working from home for some business models might not work, this current norm will enlighten other businesses in adopting a more flexible approach in the future thus affecting the standard nine-to-five.

Consequently, more time at home will affect future renting and buying choices for the property market with expected heightened demand for bigger space influencing how developers design future properties. 

In the interim, we must all sit this pandemic out and function our every day as best we can. But as people spend more time shopping online, partaking in virtual exercise classes, and realising what is possible to do within the confines of four walls, a new appreciation for the home will grow as well as a shift in the overall spending habits and the economy itself.

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Homebuyers and renters compile a criteria list when looking for a new property. The Internet helps this process as it has developed into a vital resource to access information of available properties ahead of an inspection.

Property portals like DDproperty are invaluable allowing buyers and renters to gauge the market, assess availability within their budget and in different neighbourhoods. 

But what influences people the most when looking for their next property? Location, location, location is often drilled into buyers and tenants when looking for a property.

Choose the right location as a buyer and the likelihood of capital appreciation is greater and for investment landlords, a particular location will appeal to a larger pool of tenants. For owner-occupiers, the ideal neighbourhood will enhance their life by being close to where they work or socialise. 

This ethos has been echoed in DDproperty’s recent report, ‘DDproperty’s Thailand Consumer Sentiment Study H1 2020’. The report collected data to evaluate how homebuyers perceive the Thai property market and what influences buying and renting decisions.

When questioned where priorities lie when looking for a new property to buy or rent, respondents overwhelmingly stated location. This view was shared between different age groups, relationship statuses and income earners suggesting that buyers desperately want to be in their preferred neighbourhood. 

The next influencing factor found in the report was the security and safety of the area, followed by infrastructure and amenities, and then future developments in the area.

The rankings of these were similar for nearly all age groups, income earners and relationship statuses, although high-income earners and those over 60 years of age were more concerned about infrastructure and amenities over security and safety.

Interestingly buyers and renters have slight little interest in the views of the real estate agent suggesting their job is little more than to open the door for an inspection!

As expected price plays an equally important role for buyers and tenants topping the rankings of the most significant internal factors. This sentiment was felt across all ages, relationship statuses, and income earners.

However, the report found that price for high-income earners was even more significant implying that this category thinks with their head rather than their heart. Following close behind price is the size of the unit followed by facilities. 

If we compare location with the price to gauge where priorities lie, while each topped their individual rankings, location by far is the most important of the two.

Since price determines the size of the unit, this suggests that buyers and renters are happy to sacrifice how big the property is in lieu of living in their desired locale explaining why location, location, location is such a strong mindset in the property game!

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The arrival of coronavirus (COVID-19) sent shockwaves across the world. While China went into lockdown, other countries switched onto high alert and swiftly an impact was felt on economies including Thailand.

2020 was already poised to be another tough year for the Thai property market. DDproperty data cemented this concluding that their Price Index had decreased 6% in the final quarter of 2019 while the Supply Index was also on a downward trajectory declining 8%.

• The Price Index reached its highest decrease in any of the last 8 quarters, find out more.

In fact, the Price Index drop was the biggest experienced in any of the eight previous quarters. A slowly recovering economy and high household debts were to blame for a sluggish residential market but the government introduced several stimulus packages in a bid to get the property market moving.

This included reducing the housing transfer and mortgage fees to 0.01% for those buying homes valued at THB3 million or less.

However, such incentives will not counteract COVID-19’s negative influence. Already there have been fewer transactions from foreigners, some overseas owners have requested to delay ownership transfers and not to mention some deposits being abandoned entirely. Foreigners are a big chunk of buyers of Thailand property with the Chinese making up a vast proportion of this.

Why Southeast Asian Real Estate Markets Remain Attractive To Chinese Investors?

Kamolpat Swaengkit, Country Manager of Thailand commented;

“The total ownership transfer values from the Chinese alone amounted to over THB20 billion, which is more than half of Thailand’s foreign purchasers. COVID-19 has prompted these buyers to withdraw their purchase despite losing their deposit. The absence of the Chinese will inevitably have a significant impact on our country’s property market.”

Developers and sellers have become reliant on this foreign injection but DDproperty has already noted that there has been a lack of condominium investors in the market. This has resulted in a stagnant condominium inventory and sellers trying to entice buyers with promotions and incentives.

At the same time landed home and those close to future mass transit lines have been performing well. These properties are purchased for owner-occupiers rather than speculative investors, which sellers may have been resting their laurels on for too many years.

Why is buying near to a mass transit network a wise investment?

DDproperty data reveals that the price for landed residential homes has increased by 12% in the last two years. Unsurprisingly the supply for this property type has been increasing too.

In conclusion, overall the Thailand property market has become quite complex. There are several factors influencing supply, prices and absorption rates and it is no longer a case that all property purchasers make for a lucrative investment.

More properties are being bought for end-users, in particular houses as opposed to condominiums, and new areas of Bangkok are enjoying healthy increases such as Don Mueang that is set to be the latest transport hub.

COVID-19 has been an unexpected twist for everyone, but its influence in Thailand could remain for a long time after it has passed and especially as the Kingdom very quickly felt the repercussions of reduced Chinese tourists in lieu of the outbreak.

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As we bid farewell to 2019 and enter a new decade, real estate firm CBRE looks back on the resident market that they quote as being ‘very challenging’ for Bangkok.

Slow economic growth, high household debt, and increasing supply have been common themes throughout the year continually blamed for the market’s sluggish nature despite 2019 starting in good stead.

Couple this with a particular strong Thai baht and Bangkok property for many foreign investors is a little less enticing, hence the slowdown in this sector of buyers.

During more stagnates market cycles the assumption often veers towards reduced property prices. However, developers are not necessarily in a position to venture down this path due to high building costs off the back of increased land prices.

• Forecast about Thailand’s real estate market in 2020 from the DDproperty Property Market Outlook

Instead, developers have delayed new site acquisition and held back on property launches to avoid flooding the market so much so that CBRE research reveals that only 1,268 units were launched for the third quarter of 2019, the lowest since the same period in 2015 and a decrease of over 80 percent from Q3 2018.

Both the Bank of Thailand and the Government are attempting to buoy the market. Although CBRE believes that with inadequate funding, incentives such as reducing transfer rates and mortgage registration fees have little impact. Instead, developers need to look to diversify their assets over several property types rather than solely relying on residential to produce a lucrative performing property.

Aliwassa Pathnadabutr, Managing Director of CBRE Thailand, commented,

“With the growing uncertainty in the residential market, developers will need to minimise and diversify investment risks, creating a more diverse revenue stream. Many developers have already started looking at recurring-income properties or mixed-use developments, especially on large land plots, to make their projects more attractive, with complementary uses in a single compound. Key resort destinations like Hua Hin, Pattaya, Phuket and Krabi present opportunities for developers as Thailand’s infrastructure is expanding significantly and tourism industry remains as strong as ever.”

For individual investors, affordability remains key for 2020. Price increases are forecast to remain on their slow trajectory to keep buyers interested and to gain traction. The need to carry out research ahead of making a property purchase is required more than ever while speculative investors have shied away since ‘flipping’ Bangkok properties for a profit ahead of completion is no longer a dead cert.

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The market faced some challenges this year.

A combination of the country’s economic performance, rising development costs that are passed onto buyers and the introduction of the Bank of Thailand’s Loan-to-Value regulations all contributed to the lackluster appetite amongst buyers looking to dip their toes into Bangkok property.

As buyers are put in a weaker position, developers are left with more inventory and to shift this supply they will continue to incentivise buyers with promotions.

While this might paint a slightly bleak outlook it does create a window of opportunity for buyers looking to secure a bargain. In fact, this could be their time and now is the time to shop around! Coincidentally private sellers should hold tight and wait for stock levels to decrease unless they are in dire need to offload their assets.

Rising household debts have led to developers in 2019 to focus their attention on condominiums priced over THB 10 million knowing this segment tend to be cash-rich and not affected by the country’s economic performance.

Simultaneously there has been a rise in residential construction along the city’s mass transit line especially the city fringes as developers and investors alike look to capitalise on this future growth. Once complete in 2027, this infrastructure network will have 11 routes, 466.1 km of track and an impressive 297 stations illustrating the scope of the project.

• Mass Transit Lines Making Positive Ripples On Property Prices

Bangkok’s outer suburbs are traditionally the location for single and townhouses, and interestingly DDproperty has noted that there is an increased demand for these property types. The mass transit network allows people from Samut Prakan to come into central Bangkok with ease so could the passion for central Bangkok bolt houses be waning?

• Find out more about Bangkok’s property market from DDproperty Property Market Outlook 2020

It is unlikely but market sentiment suggests that there is more choice for buyers than ever before. They are no longer tied to the city’s saturated areas of Sukhumvit and Sathorn as the city is opening up due to the BTS Skytrain and MRT.

However, there will still be demand for these popular and well-established areas as affirmed by DDproperty’s research that condominium supply in 2019 has been dominated in Wattana. Rather buyers now have the opportunity to branch out.

• The Merits Of Buying Near To An Already Popular Area

2020 is already seeing a shift in the market. Developers are building mixed-used schemes incorporating residential, commercial and retail to diversify their assets recognising the need to spread their eggs. Plus, the cabinet has approved slashing transfer and mortgage fees for properties under THB 3 million which should arouse some traction and get the lower end of the market moving.

Bangkok’s property market is still very much active, but now more than ever, developers and investors are advised to carry out their due diligence before parting with their cash to ensure a lucrative and long-term asset.

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The concept of a story has developed from its traditional format. A story was previously known as a form of entertainment where a series of events from imaginary or real people were documented and told. A story is also used to account for past events in someone’s life.

However, with the advent of social media, a story has now become a vital marketing tool, which was discussed in-depth during a panel, ‘How to tell a digital tale that will grip your audience’ at the PropertyGuru Real Estate Summit 2019.

Stories are used across all social media platforms, such as Facebook, Instagram, and YouTube. In this context, a story is commonly used to portray an event or bring awareness to something such as a product.

The panel discussed how a story is used to evoke emotion and as a media campaign to engage with the user, which is amplified further as stories are watched by people who actively search for it.

This is a contradiction to normal advertising methods that are thrust everywhere, from billboards to the side of trains, buses, and taxis, from posters to ads that pop up on our screen.

A perfectly executed story takes its audience on a journey. For property this might be the process of looking for a house, watching it being built or viewing a walkthrough of each room.

Companies need to have active and current social media accounts to keep up with the latest marketing trends and to keep their audience stimulated, with the ultimate aim of securing a sale.

Technological advances such as drones have become an invaluable resource in the real estate industry that also boosts storytelling according to Shailesh Goswami, Co-Founder and Chief Executive Officer, Foyr who sat on the Real Estate Summit panel.

They can show a view from the 29th floor of a condominium before it is even built and provide a bird’s eye view of a plot of land to show what surrounds it. They offer audiences an impressive insight into a product without having to be there.

Some developers have even successfully sold properties to investors who have not even been to the site or even stepped foot in the country thanks to these new marketing techniques.

For audiences to engage with stories, they need to be authentic and trustworthy. Posting on social media can be polished taking hours to perfect with the right filters and wording.

However, the nature of Facebook and Instagram stories is that they offer a raw insight as they are living for a limited time. Of course, they too can be flawlessly edited but there has been a real turn-off for ‘fake’ social media of late, and marketers are well aware that the power of a story is one that relates to its audience.

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A relatively new term, ‘sharing economy’ came to our attention the year that Airbnb became a household name. It was coined to reflect the changing habits adopted by people whereby services and products are shared rather than bought.

Its presence can be witnessed across various platforms that span transport, luggage storage, and co-working spaces. Popular names include Grab: Thailand’s version of Uber, Stasher that provides a luggage storage solution and HUBBA, a Bangkok co-working concept.

At the PropertyGuru Real Estate Summit, a panel titled: ‘The “Sharing Economy” phenomena: how will it impact Asia’s major cities?’ discussed this topic extensively. The panelists recognised how sharing economy entities have created an entirely new economy, which is forecast to become the mainstream.

Societies are veering towards a more shared style of living whether that be renting an Airbnb while on holiday or business trip or using a taxi-hailing application in favour of car ownership. While the likes of Airbnb deem to have a detrimental effect on the hotel industry, new ideas plug this gap such as a Stasher which also benefits from Airbnb.

Catherine Ainsley, Global Head of Partnerships, at Stasher explained how this luggage holding facility allows people to leave their suitcases and bags in over 1,000 locations across 200 countries, enabling users to get on with their day without having to haul their belongings around.

Ideal for people who have checked out of their Airbnb but might not be leaving the city until later that day. While many of these Stasher locations are situated in shops, some are in hotels creating a new revenue stream in place of what might be lost due to Airbnb.

This innovative company is also creating hotel add ons such as day package where users can enjoy the hotel’s facilities for an extra charge.

• Condotels Are Catching On.

Historically co-working spaces are geared towards individuals who require flexible office solutions. Digital nomads continue to rise with a fair chunk being based in Bangkok, Phuket in Chiang Mai.

• Millennials’ Thirst For Co-Working Spaces

However, co-working spaces now have a wider net of tenants. Archawat Chareonsilp, Chief Strategy Officer, HUBBA Thailand told how smaller companies are favouring HUBBA’s office set-up which lacks the long term commitment and investment that traditional offices offer.

Moreover, the sharing economy is not just about products and services, it is about creating a knowledgeable platform for people to share their expertise and grow from. Co-working spaces provide the ideal environment for this.

Away from work, co-living is on the rise too. As property prices ramp up, one solution is to create smaller units with shared facilities that are therefore more affordable. This is the trend is expected to head in an upward trajectory and to develop to cater to aging populations who seek different living solutions.

• Co-Living: The Way Forward?

Developers are continually looking at creating more versatile assets through mixed-used schemes for better-performing investments, but simultaneously the sharing economy is changing the way we live that impacts the real estate industry.

For example, with the increased use of transport sharing applications comes fewer cars and a decline in demand for car parking spaces in new condominiums.

As a result, astute developers across residential and commercial are keeping an eye on this growing and influential economy.

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Property markets are cyclical experiencing ups and downs depending on economic factors. Recent research from DDproperty has indicated that Bangkok’s residential property market is currently in a sluggish stage.

A continual stream of supply since the beginning of the year, new Loan To Value regulations tightening the belt of investors looking to buy a subsequent property and burgeoning household debt are all cited as reasons for this. Coincidentally this has led to the DDproperty Price Index, used to illustrate seller optimism and anticipated achieved sale prices, remaining static for the third quarter of 2019.

At the same time, the Price Index for condominiums has also remained the same. This is the first time there has been no change in this index for the last ten consecutive quarters. Single houses have however slightly increased by 1 percent, a knock-on effect of the extension of the city’s mass transit lines which have pushed up values but at the same time, townhouses have decreased. 

These figures could suggest that there is an increasing desire to live in single houses over other property types. Previously the condominium market performed well in part due to their central locations. Bangkok’s residents wanted to live closer to work to avoid a lengthy and unpredictable commute to work and lateral living condominiums perfectly filled this void. Those who could afford to would invest in a city bolt hole to stay during the week in addition to a house in the suburbs. 

However, the extension of the mass transit network has changed this. It is now possible to live in a house and have access to a reliable and efficient transport means. This current market blip can certainly be attributed to macroeconomic factors and a glut of supply, but looking ahead it will be interesting to see how many the condominium and single house market fair, and whether those living in the vicinity of the mass transit line use it. 

Nevertheless, the weak market does create a window of opportunity for buyers looking to secure a property now. With a big choice in available units and developers keen to offload inventory, sellers are well-positioned to take advantage of this to secure a lower asking price. Developers have already been responding and offering various promotions to entice in purchasers, suggesting it really is a buyer’s market.

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The debate about whether Airbnb is legal in Thailand has been about for some time due to different interpretations behind the law. In fact, this ambiguity may have helped propel the condotel sector.

These condominiums possess a hotel license allowing units to be rented for a short term period, which could be days or weeks. A concept that is well received by tourists and business people who relish the space and amenities of this set up when visiting Thailand rather than a traditional hotel room. 

“Short-term leasing has become more popular in Thailand’s major condominium markets. But, without a hotel license, it is an unlawful business,” stated Ms.Pitinut Pupatwibul, Senior Vice President, Strategic Advisory, JLL’s Hotels and Hospitality Group.

“Condotels are a development option that helps prevent co-owners in offering units for short-term leasing from potential litigation. At the same time, the clear structure and purpose of uses of condotels can help prevent resistance from buyers for private users who may be unwilling to welcome short term guests into the building”.

Real estate firm JLL has witnessed a surge in condotels in some of Thailand’s most popular tourist destinations, namely Bangkok, Pattaya, and Phuket. This increase is in part as investors are seeking alternative and more flexible opportunities that condotels fill the void, a trend that developers have responded to. 

The good news for condotel investors is that aside from the guaranteed return incentives that most offer, a designated operator manages the entire letting process. Therefore unlike Airbnb where hosts have to manage each booking, arrange cleaning, meet guests and deal with the financial side, a condotel owner can shy away from all of these responsibilities knowing that the letting is also 100 percent legal. 

Executive Vice President of Investment Sales at JLL’s Hotels and Hospitality Group, Mr. Chakkrit Chakrabandhu Na Ayudhya, has commented,

“Though condotels are not new to Thailand and can be found across the country especially, in holiday destinations such as Pattaya and Phuket as well as Bangkok, they still represent a small part of the country’s real estate industry. However, our research shows that condotels are becoming an increasingly popular development option and are likely to grow in number over the next few years.”

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People are living with their parents for even longer. This is according to the latest Consumer Sentiment Survey carried out by DDproperty which collected data from 865 respondents online.

According to the report, 57 percent of millennials live with their parents and of this group, over half of these have no intentions of departing from the family home anytime soon.

• The Benefits Of Buying Young

Looking after parents is the single biggest factor why they are not moving out, this is followed by respondents stating that their family home is big enough and that they are not married. These results reflect the strong family unities that exist in Thailand that influence the way in which people live.

Respondents who have already moved out of their family home did so mainly around the 25 to 27 year age bracket and the 28 to 30 group. However, for those still residing at home, half of the respondents have no intentions of moving out until they reach 35 years of age. This reflects that there is not a huge urgency to set up a home on their own whether that be for family or money issues.

Regardless of society suggesting that individuals still strive to be property owners, the report suggests that this desire to reach the first rung of the property ladder does exist but not at such a rapid rate.

Property being too expensive did feature as a reason for not moving out of home, but only a fraction cited this as being a barrier once again emphasizing that wanting to be close to family is of utmost concern.

• Now Is The Time To Buy

Those wishing to move out are however planning ahead. A high proportion of respondents stated that they have a monthly savings plan and even one in three confirmed that they have an investment strategy in order to reach their property ownership goals suggesting that those interviewed are taking responsibility for this purchase rather than falling back on the family to make this move.

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Technology is ingrained in our everyday life. It is used to promote efficiency and enhance production, and the advent of smart cities whereby data is collected and used to manage resources and improve performance is making waves across Asia.

Recent research released from JLL has advised that the real estate industry plays a role in smart cities is a success. Jeremy Kelly, Director of Global Research at the real estate firm, commented:

“Cities are unleashing technologies such as the Internet of Things and Artificial Intelligence to solve some of the pressing problems of urbanisation – whether it’s traffic or waste disposal or public safety. This has the potential to change the way we live and work, as well as how we interact with the buildings and infrastructure in our cities. These innovations hold particular promise in the Asia Pacific where city populations are growing rapidly.”

Attention needs to be focussed on looking at how individuals live their lives in order to perfect smart cities. Without which the cutting edge technologies are not used effectively.

JLL’s research noted the growth of smart cities in Asia and revealed that Thailand has plans between 2020 and 2021 to develop 60 smart cities in the Kingdom with ambitions of adding a further 40 the following year. This follows Singapore who launched the concept in 2014; China and India also have plans to build smart cities too.

• Bangkok Recognised As A Leading Global City

JLL argue that should, ‘real estate industry catch(es) up in technology, it could bridge the gap between smart city solutions and the physical spaces where people work, live, and play.’ They liaised with experts from the real estate and technology fields as well as speaking with the government as part of their research, that concluded that many smart cities across the world have been slow to get off the starting block since many are not supported by a strategy for their implementation.

Bureaucracy is in part blamed for this particularly due to the scale of the project but the technology within the real estate industry will improve various elements including the construction stage and the management of buildings which is good news for the residents as well as the investors.

“To fulfil the promise of smart cities, we must start focusing less on technology and more on how to use it to make lives better for people. We believe real estate can be a connector between the people who are the lifeblood of cities and the digital infrastructure that is increasingly powering our urban environments. It’s time for the real estate industry to step up,” adds Mr Kelly.

• Now Is The Time To Buy

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The property market this year has started in good stead according to the latest DDproperty Property Index. Research reveals that the price of residential properties in Bangkok is higher for the first four months of 2019 if compared to the final quarter of 2018. In fact, prices have increased by 5%.

The prime catalyst for this is higher land prices as well as the growth of the mass transit networks that have helped to drive property prices in an upwards direction. All types of property located near to the mass transit network that is due to be operational this year, have enjoyed healthy increases suggesting the desire to be near public transportation and the impact it is having on the property market.

Astute investors are naturally eyeing up this sector since the reliance of Bangkok’s mass transit lines is becoming even stronger as residents want to avoid the traffic on the roads and travel in a more efficient, reliable and green manner.

• Bangkok Recognised As A Leading Global City

Condominiums near to this vital Bangkok bloodline have risen by 4% from the previous quarter which is also up by 14% over the last two years. Unsurprisingly developers are continuing their focus here since they predict this is where the most amount of growth is. There is more emphasis on units priced over THB 8.5 million where this segment of buyers are not as affected by household debt and relish in stronger purchasing power too.

The Thai Government have been playing their part as well. With a budget of THB 7.6 hundred million sets aside for public sector megaprojects, public transportation is fairing well. Simultaneously the ongoing trade war between China and America has moved manufacturing plants to Thailand in a bid to avoid export tariffs.

• Get To Grips With The Payment Terms For Thai Property

It is forecast that interest rates for the remainder of the year will stay at 1.75% helping buyers with existing loans and those looking to expand their property portfolio. This all ties in nicely with the results from DDproperty Consumer Sentiment Survey that stated that two-thirds of interviewees are happy with the current property market.

Looking at particular Bangkok neighbourhoods that are enjoying this mass expansion of the BTS and MRT networks, is first Chatuchak that has the highest performing properties off the back of the BTS Green Line extension that in the future will interconnect with Lat Phrao station.

The next locale was Bang Khen District that also benefits from the Green Line extension and then Wang Thonglang where prices have headed upwards due to the MRT Yellow Line presence here.

• Foreigners Flock To Bangkok

The growth of Bangkok’s mass transit network is not only welcome news to passengers who use it, but it is also opening up new areas of the city which were once hard to reach. Finally, it is enabling property prices in these areas to flourish.

>>DDproperty Property Index Saw Prices For Residential Property In Bangkok

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DDproperty has collected extensive data in order to analyse the state of play of Bangkok’s residential market and have concluded that we are in the midst of a weaker part of the property cycle. A disadvantage for anyone looking to offload their asset but the prime time to snap up a bargain.

Demand has lessened ahead of predictions that anticipated for this to occur in the second quarter of this year and has encouraged developers to heavily promote their units in a bid to generate sales. This window of opportunity should entice investors since competition for purchasers is fierce. DDproperty Property Index encourages buyers to shop around for the best deal to the make the most of this more sluggish time.

Simultaneously Thailand’s leading property portal has also urged developers to carry out in-depth feasibility studies before even thinking about laying the foundations for their next new project. Carrying out their due diligence will ensure that the right property is being built in a given location to be well received by the market rather than creating a glut of unwanted units.

This is particularly important since the Bank of Thailand’s new regulations might impact the market further when introduced in April which includes tighter lending. Regardless of this, the market is not completely dead and there are sectors that are performing well.

Condominiums priced over THB 8.5 million are gaining significant traction since this segment of buyers are not affected by economic issues or household debts and has helped to keep Bangkok’s overall residential prices stable quarter-on-quarter and spur a three percent increase over the course of the year.

Land prices continue to head in an upwards trajectory, a cost that is being passed onto individual investors, especially for plots close to the mass transit lines which are most in demand by developers as well as end-users.

For example, the extension of the BTS Green Line has pushed prices up in Samut Prakan by nine percent, with Bangpu sub-district increasing by a staggering 23 percent. Attention is likely to remain hot for addresses along the mass transit lines and private buyers should consider these locations before parting with their cash.

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DDproperty, Thailand’s number one property portal, has revealed the findings of its Consumer Sentiment Survey for the first half of 2018, and found that most think property prices are too expensive and combined with the current economic downturn, consumers’ satisfaction with the real estate climate has declined. The survey, which polled over 1,000 people, also found that consumers want the government to issue new measures to support people in purchasing property and that the real estate market should keep an eye on the increasingly important Millennial demographic.

The DDproperty Consumer Sentiment Survey H1 2018 found that 70% of the survey’s participants thought that current properties are expensive or overpriced, while 61% also thought that the economy is not performing well, leading to dissatisfaction with the Thai real estate climate.

Due to such factors, real estate consumer satisfaction during the first half of 2018 dropped to 57%, which is down from 61% on H2 2017 and also down from a high of 68% three years ago. With less purchasing power, 61% of those surveyed agreed that the government has not been doing enough to make housing affordable.

Respondents suggested that the government should provide more support for home buyers by,

• First, regulating prices of newly launched properties by developers (69%)
• Second, providing more subsidies to first time home buyers (62%)
• Third, regulating supply of all property types (45%).   

However, 83% of consumers in the survey expect real estate prices to increase within 1 to 5 years. As for buying intentions, 41% are planning to buy a home within six months, up from 36% in the H2 2017 survey.

Mrs. Kamolpat Swaengkit, Country Manager for DDproperty

Mrs. Kamolpat Swaengkit, Country Manager for DDproperty commented that “DDproperty’s Consumer Sentiment Survey has focussed on consumer’s demand for housing, and it’s clear that it still exists. However, pricing appears to be the main barrier to buying, especially for first time buyers who are often new jobbers wanting to create a family but have low purchasing power. These first-time buyers, however, will need to make purchase decisions soon as property prices continue to trend upwards which will make entry into the market even more difficult.”

Moreover, 36% of respondents indicated that Outer Bangkok is their preferred location to purchase. Twenty-six percent intend to buy in the new Central Business District (CBD), which includes Ratchada, Ladprao, and Rama 9 areas, while 15% are interested in the Mid-Inner Sukhumvit area (Phrakanong, Onnut, and Udomsuk). With regards to property type, 58% said they are likely to purchase a single-detached house while 55% said they were likely to buy a condominium.

95% of respondents are looking to buy properties priced no higher than THB5 million, whereas 48% prefer a price of less than THB1 million, and 35% are looking at the THB2-3 million price range. The key factors that influence buyers’ decisions, aside from price, are firstly, the location (95%); secondly, infrastructure and available amenities (69%); and, thirdly the safety and security of the local area (64%).

Millennials To Become A Significant Real Estate Demographic

The survey also looked into the real estate potential of Millennials (18 – 34 years old) as a group. This group is expected to influence socio-economic change in the next 10 years and the survey found that 50% of Millennials are currently living with their parents. Of this group, the top five reasons for not moving out are: want to stay to take care of their parents , do not have enough savings to buy their own home , were not yet married , the family home is still big enough to stay in together , and they preferred to save their own money rather than buy a property.

However, 45% of Millennials still living with their parents plan to move out by the age of 35, and around 65% already have a monthly savings strategy to help them buy their own property in the future.

“DDproperty’s Consumer Sentiment Survey indicates that Millennials are expected to become a large group of real estate buyers in the near future as many are currently living with their parents. At the same time, a large number are already planning to move out and have a savings plan and are looking forward to a home of their own in the future. Our research shows their budget will be THB1-4 million, so maybe real estate developers should consider catering more for this demographic and price bracket in the future” added Mrs. Kamolpat.

More insights about Bangkok property market, check out DDproperty Property Index Report and DDproperty Property Market Outlook Report and find out how much you can afford for  your new house, try our mortgage calculators . 

Highlights…
– Handbills were the main advertising media for buying/selling properties in the past
– Property trade has become technology-driven at present
– Property trade in Digital 4.0 Era emphasises on technologies which optimise consumers’ benefits

[Special Scoop] The trend of property trade in Digital 4.0 framework has become the main entryway to reach consumers, whom the latest technologies – chat bots, online bookings, Cashless Society, and AI – help facilitate in most transactions, opposing to the traditional way of using handbills which in many occasion were inefficient.

Property Trade without technology in retrospect

Many people can still recall clearly the time when everything operated manually, the time when, with the absence of technology, a common means of property advertisement was putting handbills on electric poles, information boards, or even billboards in case of agencies.

Certainly, the method revealed several flaws: credibility of the seller, clarity of the information, or the price that often didn’t correspond to the situations of the market. Incidentally, a great number of fraudulent deals had prompted the authorities to solve the problem and, with an aim to protect consumers’ rights, they warned citizens that one should go to observe the actual property before deciding to make any purchase.

Looking back, it seems like a troublesome and complicated matter to buy or sell such properties, whereas now, all the steps can be completed by our mere fingertips. For example, condo units now can be booked via developers’ websites, an ideal home on a desired location can be sorted easily on real-estate websites, or even contacting the property owners or agents can be done at home in front of a computer.

Property Trade Trend in Digital 4.0 Era

What is Property Trade in Digital 4.0 Era?

As a matter of fact, the way consumers purchase properties has completely changed from the past. Everything is becoming technology-driven and online-based. Consumers, especially in recent years, choose to search and obtain information via internet because it’s much more convenient and time-saving. For this reason, investors and developers have shifted the focus to online channels where consumers can be reached in a broader spectrum – and, of course, consumers also use this channel to sort the list of properties and thus making a quicker decision.

Property Trade in Digital 4.0 Era can be further elaborated with a few of examples.

1. Chat Bot – an innovative chat box that automatically provides solutions or any inquired information
2. Online Booking – a new custom of booking where customers easily reserve units online via developers’ websites or applications. The method often comes with promotions and privileges. In case of VIP rounds, privileged customers also get the chance to book first
3. Cashless Society – conforming to the government’s economic model 4.0 that aims to move towards a Cashless Society where products can be purchased via scanning bar codes. This extends to down payments of properties as well.
4. AI – in 2018, robotics starts to be involved more in real estate activities. For example, Sansiri’s robot Saen Dee has been invented to facilitate residents, while Ananda’s subsidiaries’ property management involves the use of PropTech and AI as the main drivers.

Not only the two behemoths are investing in robotics, DDproperty has applied AI into the company’s website and application as well. DDproperty has recently redesigned the website to a completely new look as the company shifts the focus towards a technology-driven business model. The AI will present information and services that match customers’ personalized needs, and analyse users’ behavior to deliver contents and properties they’re interested.

Customer Benefits

The changes in real estate towards online platform is not only about digital marketing, but also the convenience and benefits of the consumers as summarized mainly below.

1. Raise the standard of property trade (higher credibility)
2. More channels and options to purchase properties
3. AI innovation enables quicker and easier property sales

In spite of many things becoming so technology and innovation-driven, one need to be wary of potential dangers. The advancement in technology must come with high security and stability. Surely we need to keep an eye on, but right now, enjoy the fruition of this tech-savvy era.

This article is written by Araya Siripyak, Senior Digital Content Producer at DDproeprty.com. For more information, please contact araya@ddproperty.com

More insights about Bangkok property market, check out DDproperty Property Index Report and DDproperty Property Market Outlook Report and find out how much you can afford for  your new house, try our mortgage calculators . 

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Highlight
– Female population in Thailand will exceed male by 1.5 million people in the next two years, with 5.6 million more single women
– DDproperty Consumer Sentiment Survey reveals consumers choose single house and nursing home for their old age living
– Developers bring safety, technology, and design to answer the needs of the increasing feminine and senior citizens

[Special Scoop] Thailand’s property trend is changing due an increasing number of female and senior citizens. Smartphone has also become an inseparable factor, changing consumer behavior towards digital concern. Foreseeing these changes, developers are forging strategies to meet the lifestyle of these citizens.        

Thailand has become aging society in 2018

Official Aging Society
As baby boomers have finally turned Thailand into aging society, developers have started to launch residential projects which resonate with their need. The government also support the elderly group by offering loans with favourable requirements. Jin Wellbeing County is one of the projects born to offer everything the elderly need after retirement: social, healthcare, facilities, a hobby with income. Yet the project is not aimed to be purchased after the person has retired, but years before the person’s retirement.

Single Detached House and Senior Housing are preferred by senior citizens in their old age (data from DDproperty Consumer Sentiment Survey)

Senior Housing has gained more acceptance in Thai society due to its modern design, various facilities, and recent technology which complement a healthy living, whereas in the past it had been viewed as an unfavourable community where people left their parents under someone else’s responsibility. According to the graph single detached house and senior housing accounts two-thirds (34% each) the types of property senior citizens look for in their post-retirement life. U.S. Census Bureau, International Data Base also reveals that in the next two years, female population in Thailand will exceed male by 1.5 million people, with 5.6 million more single women, included existing widows. 

What female and senior citizens look for in a property?
1. Home with proper space for a single woman
2. Safety is the first priority
3. Elderly-friendly facilities

The graph shows over half of the participants are not worried about their old age living, while 30% of them start to look for property with elderly-friendly features, and 15% of them start to look for property near elderly care facilities

Increasing female and senior citizens led to developers’ new strategies

Property trends are always after people’s lifestyle
As Thailand is becoming an aging society, elderly-friendly facilities start to become more prevalent in new residential projects. Grab bars, wheelchair ramps, and bedrooms on the first floor have been incorporated in numerous projects in the past few years, while modern innovation like home automation, automated parking system, and smart home application have also been invented to serve the younger generation. For example, Sena Development Plc. has launched an application SENA 360 which acts like a CCTV of resident’s unit. The developer also employs female as shuttle bus drivers as feminine shows lower tendency to cause physical violence. Land and House Plc. also focuses on safety by launching PRO License Plate System which scans every car’s license plate at the entry – the technology is being used by its affiliated firms. Meanwhile, Supalai Plc. is among many developers who features their residential projects with Home Automation, allowing residents to control room’s lighting and appliances through their smartphone; the developer also aims to launch a project for senior citizens in the approaching future.

This article is written by Araya Siripyak, Content Writer at DDproperty.com. For more information, please contact araya@ddproperty.com

For more information and insight about Thailand’s property market, read DDproperty Property Index and DDproperty Property Market Outlook   

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[Special Scoop] DDproperty’s Consumer Sentiment Survey reveals that Single-Detached Homes were the most demanded product among home seekers in the 2nd half of 2017. Meanwhile, low interest rates were a key factor for consumers considering buying real estate. The locations for property seekers were Bangkok’s suburban and peripheral areas, as property prices in the heart of the city skyrocketed.

Factors which Affected Buyers’ Decision
Looking at the beginning of 2017, Thai consumers’  efforts to buy property stalled due to the country’s economic slowdown. Decreasing exports, falling currency value and accumulated household debts caused this downturn. However, by the 2nd half, the economic situation improved and the property market started to recover. In an online survey conducted during December of last year, we found 5 major factors that affected consumers seeking property in The Greater Bangkok area.

Factors of Buying
1. Low-interest rate mortgage
2. Expected increase of property value in the future

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Factors of Not Buying
1. Overpriced property
2. Unfavourable economy
3. Surging property price

Property price seems to be a vital factor and it delayed many consumers’ decision to buy property. On the other hand, the anticipation of increased property values in the future encouraged them to buy property.

“Single-Detached Home” Remained Most Wanted Among Home Buyers

Graph indicating consumers’ buying intention for each property type in the second half of 2017 (DDproperty Survey)

According to the graph, the highest percentage of “definitely would buy” property buyers are for Single-Detached Homes, followed by Land at 18% and Condominium at 16%. Meanwhile, Semi-Detached Houses the most probably were the type buyers were least likely to purchase at 13%, followed by Mixed-use at 12%. Condominium, which recorded 19% of “definitely would buy” property in the 1st half of this year, decreased by 3% in the 2nd half.

District/Area intended to buy property by consumers

Ranking
1. Outer Bangkok
2. Ratchada / Ladprao / Rama 9
3. Phrakanon / Onnut / Udomsuk
4. Chiangmai
5. Bangna / Bearing

Consumer Sentiment Survey is conducted every six months (last edition: December 2017) and enrolled with over 600 participants to reflect consumers perspectives on Thailand’s property market.

Consumers are confident in Thailand’s healthy property market in 2018

Consumers Believed in Healthier Property Market in 2018
Numerous factors are expected to boost consumers and developers’ confidence in 2018. These include lower household debts, 2-year fixed interest rate at 1.5%, the Eastern Economic Corridor (EEC) development plans, and various expansions of Bangkok’s mass transit system. These factors helped trigger a greater volume of property purchases in the 2nd half of 2017. Yet, despite the current positive momentum, we still need to watch the situation closely. What measures or schemes is the government planning to launch and will developers set the price with justice are a few of the questions that must be answered moving forward.

For more information and insight about Thailand’s property market, read DDproperty Property Index and DDproperty Property Market Outlook   

This article is written by Araya Siripyak, Content Writer at DDproperty.com. For more information, please contact araya@ddproperty.com 

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Highlight
– More joint ventures and mixed-use projects to be seen in 2018
– Promising locations near Orange, Blue, and Green Lines
– Property market shows a bright future as economy starts to recover and megaprojects are progressing
– More condominiums are expected to be seen on alleys due to shortage of land by the main road
– DDproperty Property Market Outlook 2018 reveals condominium is still the most popular asset and property for aging society is a trend this year

[Special Scoop] Many gurus have confirmed that Thailand’s property market will continue to improve in 2018, with condominium still being the most popular asset and aging society becoming a major trend for developers. Besides, there will be more joint ventures between Thai and foreign companies as well as number of mixed-use developments. What’s more to be expected from Thailand’s economy and property market in 2018? Let’s find out.

More joint ventures and mixed-use projects
Real Estate Information Center (REIC) claims there will be more joint ventures between Thai and foreign developers especially with Chinese and Japanese firms, as property markets in these foreign countries are facing restraining measures from the governments. Thailand, where the property market is not too restricted and the property price is comparatively lower, is becoming a portal for these foreign companies to expand their businesses and reduce costs, mainly through joint ventures. This is a win-win situation as land price and construction cost in Thailand are expected to increase in 2018.

Greenery-concerned mixed-use project The Forestias by MQDC

As land plots are running short and costlier (particularly in city’s central area, business districts, and areas near existing mass transit lines), many projects in 2018 were planned to be mixed-use developments to make the best out of the given land size. Not only the total cost of building a mixed-use project can be minimized, more channels to earn returns are therefore possible as well (office space and retails aside from residential units). Overall, there will be more residential projects in 2018 compared to the two previous years.

Promising locations near Orange, Blue, and Green Lines
Ideal locations for property development this year are those near Orange, Blue, and Green Lines, said Knight Frank, a leading real estate consultant. In 2018, BTS Green Line’s extension (Bearing – Samutprakarn) will be fully operational, and this will certainly spur residential demand in the suburban areas where the line passes through. Condominiums along this BTS’s new section are expected to gain demand from suburban citizens who commute to work in the city, whereas housing projects in the same areas are expected to show small growth due to greater distance to reach the mass transit line. The smaller land size required also makes it easier for condominiums to stand closer to mass transit lines, comparing to housing projects which need ten times a larger site.

Economic rebound and progressing megaprojects aid property market
Professional Real Estate Academy (P.R.A. Academy) points that Thailand’s property market is poised for a strong growth in 2018 as a result of economic rebound and progression of megaprojects from the public sector including Eastern Economic Corridor (EEC) Development Plan and various auctions for mass transit line constructions. Developers have been launching projects alongside new mass transit lines, particularly condominium, in hope to capture demand from citizens who commute to work in the city via skytrain.

2018 expects to see more low-rise condominiums on smaller streets as lands by the main roads become scarce

More condominiums on small roads due to land shortage
According to the research on Thailand’s condominium market conducted by Nexus Property Marketing Company Limited, 2018 is expected to see more low-rise condominiums arising on smaller roads as lands by the main roads are becoming unavailable and extremely costly. Nevertheless, luxury and super-luxury segments are still in the trend among new and leading developers. High-end condominiums will stick to the mass transit lines, affordable by consumers with moderately high income. Meanwhile, mid-range condos will locate some distance from the city’s central area but still reachable by mass transit lines; these condominiums are likely to meet residential demand rather than investment.

DDproperty Property Market Outlook shows developers prioritise property for aging society in 2018

Property for aging society is the trend in 2018
DDproperty Property Market Outlook, for the first time conducted by DDproperty, shows that in 2018 condominium will still be the most popular asset among property seekers and focuses on aging citizens will be found more in residential projects.

“The property market trend has changed as the nation is shifting towards aging society. Developers have been proactive about this matter even though it takes another 6-7 years for the country to fully become an aging society. Research and studies on the needs of senior citizens have also been carried out to come up with innovations which support their way of living. A greater emphasis on the design of the facilities area is one of the approaches in elders-concerned projects which, despite being an emerging trend, are becoming more prevalent in the market at the moment,” said Kamolpat Swaengkit, Country Manager of DDproperty.

Despite predictions from the experts, property market still needs to be watched closely about its trend and momentum. Make a more confident decision when buying/selling a property, check out DDproperty Property Index and DDproperty Property Market Outlook for actionable insights.

This article is written by Araya Siripyak, Content Writer at DDproperty.com. For more information, please contact araya@ddproperty.com

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Highlights…
– Phra Khanong and Chatuchak are on spotlight as BTS Green Line’s extension progresses
– Condominiums still rank No.1 for investments due to rapid price growth
– Aging consumers interest in condominiums for post-retirement living

[Special Scoop] While some locations in Bangkok have worried investors about its improbable real estate growth, there are top 5 locations poised to prosper at the moment. These locations are districts in CBD such as Wattana and Ratchathewi, and new emerging areas like Chatuchak, Phra Khanong, and Khlong Toei, all of which show a significant price growth in the property market – especially condominiums which rank No.1 in both popularity and returns.

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5 Golden Locations
The real estate market’s slowdown, caused by contracting economy and high household debt in 2015, had lowered consumer purchasing power – especially in medium and low-end segments – for nearly two years. However, the first quarter of 2017 saw a greater number of supplies year-on-year, and a higher property price index in residential projects resulted from higher land prices (2016-2019) adjusted by Treasury Department. In other words, the market is shifting to an upward trend, and areas which had experienced rapid price growth in the past two years belong to these five locations as follows:

Chatuchak – a notable emerging location

Best New Locations
1. Chatuchak – the average starting price in condominiums in Q3 2017 is at 108,951 baht per square metre, a 10% growth year-on-year compared to Q3 2016’s figure at 93,651 baht per square metre.
2. Phra Khanong – the average starting price in condominiums in Q3 2017 is at 101,450 baht per square metre, a 7% growth year-on-year compared to Q3 2016’s figure at 89,000 baht per square metre.
3. Khlong Toei – the average starting price in condominiums in Q3 2017 is at 166,667 baht per square metre, a 4% growth year-on-year compared to Q3 2016’s figure at 154,318 baht per square metre.

Top Locations in CBD
4. Wattana – the average starting price in condominiums in Q3 2017 is at 153,846 baht per square metre, a 3% growth year-on-year compared to Q3 2016’s figure at 139,286 baht per square metre.
5. Ratchathewi – the average starting price in condominiums in Q3 2017 is at 173,133 baht per square metre, a 1% growth year-on-year compared to Q3 2016’s figure at 166,071 baht per square metre.

BTS Green Line has increased property prices especially in Chatuchak and Phra Khanong

Factors Boosting Property Price Index
A sudden growth of property prices in these five locations is due to many developments from the public sector, particularly the expansion of mass transit lines, and the growth of office building market. In the first half of 2017, the total rented space in Bangkok’s office buildings is 143,000 square metre, a close figure to the previous year’s. However, Bangkok’s office building market in the second half is expected to show a significant growth, especially in premium buildings which now have the vacancy rate less than 7%, implying a strong demand for offices with high quality. A healthy office market will support the growth of property market in all the five locations, meanwhile, the BTS Green Line’s expansions (Mochit-Saphan Mai-Kukot and Bearing-Samut Prakan) will benefit Chatuchak and Phra Khanong Zones in particular.

Condominiums are popular among aging consumers for post-retirement living

Condominiums rank No.1 for investment
From the first quarter of 2015 to the third quarter of 2017, condominium and townhouse prices in these five locations have grown by 5% and 4% respectively; the single house price, however, remains unchanged. Besides its largest market share in terms of property types, condominiums are also deemed as the most profitable property to invest, regarding its characteristics of being close to workplaces and mass transit lines, or modern designs which follow the trend Prop Tech, all of which prompt an increasing demand from the consumers. Interestingly, aging consumers are also looking forward to live in condominiums during their retirements.

More insights about real estate investment in potential locations Download DDpropperty Property Index Report here and don’t forget to check mortgage calculators which can help you figure out how much you can afford, how much you should borrow, and more.  

This article is written by Araya Siripyak, Content Writer at DDperoperty.com. For more information, please contact araya@ddproperty.com

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The Thai property market remains buoyant as the economy continues its slow recovery, with increasing supplies providing greater opportunities for new homebuyers, the inaugural DDproperty Property Index revealed today.

DDproperty, Thailand’s No.1 online real estate portal, launched the Property Index for Thailand today to help homebuyers make an informed decision in making one of their biggest, and most expensive, purchases. The DDproperty Property Index crunches vast amount of data to provide comprehensive insights on residential property, including prices, trends and seller optimism. In the first phase, the research focuses on Bangkok.

During the third quarter of 2017, the DDproperty Property Index (Bangkok, Price) reached 199, a 5 percent increase from the second quarter of this year, highlighting the ongoing growth in the Thai market since the start of the year. The modest growth is further proof that the property market is gradually recovering from Thailand’s economic slowdown and weaker purchasing power in the mid to low-end segments caused by rising household debt.

“We’re cautiously optimistic about the Thai property market and believe there are opportunities for sellers, but particularly for buyers given rising supply levels and the low interest rate environment which is expected to persist for some time,” said Kamolpat Swaengkit, Country Manager for DDproperty, which each month helps more than three million Thais find a home.

PROPERTY PRICES

PROPERTY PRICES, SUPPLY ON THE RISE
The Index tracking residential prices increased 13 percent year-on-year during the third quarter, bringing growth over the past two years to a remarkable 53 percent.

Condominiums continue to command the most attention from homebuyers, with the condo price Index hitting 219 in the third quarter, continuing an upward trend from the previous three-months.
During the same period, the DDproperty Property Index (Bangkok, Price) booked robust growth in Chatuchak district with a 10 percent increase quarter-on-quarter, while there was a 7 percent rise in Phra Khanong district during the quarter.

Property supply in Bangkok has also continued to rebound after a difficult start to 2017, increasing 5 percent in the second quarter of this year and an even stronger 14 percent in the July-September period.

Supply volume during the third quarter hit a record high on the DDproperty Property Index (Bangkok, Supply), with a 20 percent increase from a year earlier. Active launches by developers since the beginning of 2017 have been a trigger for rising supply.

“Supply levels are quite high, although buyer demand remains soft as a result of Thailand’s slow economic recovery together with a lack of government stimulus measures,” Kamolpat said. “This has had an impact on the confidence of buyers, with many adopting a wait-and-see attitude.”

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CAUTIOUS ECONOMIC OUTLOOK
While Thailand’s economic outlook remains soft, there are some areas for optimism: the ongoing 2015-2022 transport infrastructure and development plan; steady interest rates at 1.5 percent; and continuing growth in foreign tourists.

DDproperty also expects residential property prices to appreciate further, albeit at a tentative pace, thanks to infrastructure mega-projects development, along with possible government economic stimulus to boost spending and consumer confidence.

Foreign demand for property in Thailand is also expected to provide a strong uptick in residential prices, particularly with the Finance Ministry looking to allow foreigners to lease land for residential purposes for up to 50 years, compared to the existing 30-year limit.

“While the current real estate environment is somewhat optimistic for people looking to sell their property, there are numerous opportunities for buyers to tap into. Although prices may continue to rise, buyers can take advantage of low interest rates along with competitive promotional campaigns that developers offer to woo buyers,” said Kamolpat.

To read the full report, please click here.

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[Exclusive Interview] Though the past 13th October this year was the mournful mark of the beloved late King Bhumibol Adulyadej’s pass away anniversary, his teachings, virtues, and morality are still entrenched in every heart of Thais, as if he is still watching down to us from the heaven above. For this occasion, we would like to replace the sorrow felt by everyone with our late king’s royal preaching and guidance which are recapped by these real estate figures in their lives and works as follows. 

Mr. Pornnarit Chuanchaisit – President of The Thai Real Estate Association 

“What always remind me of the late King Bhumibol Adulyadej are pictures of him travelling to visit every corner of Thailand to acknowledge the livelihoods and solve problems for Thai people. As a president of The Thai Real Estate Association, I will continue his mission to improve the life quality of Thai people. As our father had mentioned that provincial regions in Thailand must be vigorous and united to achieve sustainable wellbeing, I have established a project “Pattana Muang companies” to bring sustainable growth and developments into 14 provinces in Thailand, led by private regional developers who adhere to the teachings of our beloved late king.”

Mr. Thongma Vijitpongpun – Group Chief Executive Officer at Pruksa Real Estate PCL

“Pruksa significantly notes the importance of good governance – from large-scale perspective to every detail in the organisation – by aiming to create quality properties to bring warmth and happiness to all Thai families. I apply our late king’s Sufficiency Economy principles into my daily life: living with simplicity, spending as necessary, dealing businesses with justice, and focusing on improving the society. I have set up Vijitpunpong Scholarships and, in the past several years, have been donating my own money for different foundations and institutions who support education, religion, and society in Thailand. I want Thai people to apply our late king’s Sufficiency Economy principles into their lives and act towards the benefits of the society, to help prosper our nation towards the bright future.”

Mr. Uthai Uthaisangsuk – Chief Operating Officer at Sansiri PCL

“There are countless teachings from our late King Bhumibol Adulyadej which can be applied to works but to select one of them as a motto regarding the management role, I would pick this quote:

‘Problems can always arise in our works and when they do, we should find the resolutions right away, not leaving them to become a burden of difficulties later on. Everyone should realise that in every problem there is a solution. If one cannot solve the problem alone, do it collectively with a sense of unity to come up with different solutions, to prevent problems in turning into obstacles which can hinder the improvement and success of our works.’

This simple principle may be short yet profound in its meaning and broadly covers many aspects of anyone’s works. The main message from our beloved late king is that no one can avoid problems while working, but the first step to overcome the problem is to realise that there is a problem and have a courage to deal with it directly.

Mr. Vittakarn Chandavimol – Chief Marketing Officer at AP (Thailand) PCL

“One of our late King Bhumibol Adulyadej’s teachings I always teach my children is to have endurance, toleration, and savings. Our late king foresaw that the new generation would become more impatient for things they need; by applying this principle, our habits would change to be more virtuous which can solve different problems more effectively. Another principle everyone can apply to oneself is to always be conscious in whatever we do and, personally, I have to be conscious before dealing with the problems both in my works and in the business sector. Similar to the way our late king turned obstacles into historical innovations which had improved the life quality of Thais, we also strive to bring in new innovations to lift up the life quality of our residents.”

Mr. Kittipol Pramoj Na Ayudhya – Managing Director at Summakorn PCL

“During my childhood, I remembered, on every birthday of our late King Bhumibol Adulyadej, my parents would go listen to the king’s speech at the palace and back home to discuss what he taught about with me. This happened every year. What our late king taught were often not so long yet clear and full of deep meanings. One year our late king mentioned about the word “Double Standard,” the day after this term became widespread and turned into a common saying nowadays. To follow our late king’s path, I would apply his principles of morality by knowing what righteous responsibilities an entrepreneur should exercise.”

Mr. Tritecha Tangmatitham – Managing Director at Supalai PCL

“The royal guidance from our late king Bhumibol Adulyadej I adhere to is to do good things without the notice of others. I have provided citizens a religious activity where people come to meditate and bring up the sense of self-awarness, and seminars which educate people about certain topics for free, to improve the quality of their lives. For my work, I practice what our late king advised to Mahidol students on the commencement day, 4th July, 1997: “In every profession, besides having a comprehensive knowledge in the field, one must also bring ethics into the works to be great examples for colleagues and help the business grow towards success.”

Dr. Kessara Thanyalakpark – Director at Sena Development PCL

“What we essentially value is the Sufficiency Economy of our late King Bhumibol Adulyadej. With this philosophy which points out the importance of being cautious in actions and wellbeing of sustainable life, our company was able pass through ups and downs by carried out an effective risk management. Another guidance of our late king we apply to our residential projects is the use of Clean Energy such as solar cells. We believed that his teachings still remain in everyday life and the minds of all Thais, all of whom want to continue his gracious virtues.”

Kamolpat Swaengkit – Country Manager at DDproperty.com

“Our late King Bhumibol Adulyadej’s principles we take into practices are honesty, sacrifice, endurance, and ideology for the benefits of the society. These principles are not only applied throughout our organisation, but also to our families. Every action we take must base on faithfulness and transparency and able to benefit the society. As DDproperty is an organistion who provides complete real estate information for the consumers, we are committed to keep improving our website and deliver updated information for Thai people to find the right property and live a quality life, following what our beloved late king had mentioned: “Do good things for the benefits of the society, for Thai people to live well, eat well, in a sustainable way.”

The content is written by Araya Siripyak, a content writer at DDproperty.com. For more information, please contact araya@ddproperty.com

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Highlights
– Condominium rental market in CBD still progresses with some demand despite great supplies and high competition.
– Renters still favour small-sized units (studio and 1-bedroom) in new projects located near public transits or business hubs.
– Risky locations to watch out: Rattanathibet and Tiwanon – highly competitive market, low absorption rate, low purchasing power forcing cuts in purchasing price and rental price.

[Special Scoop] At present, Bangkok’s overall real estate market and rental condominium market are in a situation which everyone must keep an eye on. Despite the market’s positive sign in the second half of this year, there are still some problems which are slowing down the market growth: household debt and home loan rejection. These problems, however, are found mostly in condominiums located in Bangkok’s peripheral areas, prompting investors to look for a long-term investment by rents in condominiums in CBD instead, which still grows with some demand in spite of a highly competitive market. Nevertheless, Bangkok’s rental condominium market’s unreliability still must be watched closely.

Condominium rental market’s situation in 2017
Despite a stagnant real estate market in the first half of this year due to global economic slowdown and domestic problem of high household debts which prompted banks to impose tightened lending rules, the situation in the second half seemingly becomes active once again especially condominium rental market in CBD, due to continuous growth of supplies and demand in the areas.

It is found that small-sized condominium units are more in demand than large-sized units, possibly due to the lower rent price and the fact that most renters are individual salary earners rather than families. JLL, an international real estate consultant and service provider, found that small-sized unit renters favour new projects over ones established for more than five years. On the contrary, family-like renters favour large-sized units in old projects due to greater usable area. In general, CBD condominiums located near public transits or business hubs give the rent prices between THB 50,000-70,000 per month.

Units in new projects in CBD can still fetch a high rent price

Renters favour small-sized units in new projects
The favouritism of small-sized units among condominium renters had encouraged developers to shift their focuses on building a multitude of studios and 1-bedrooms to support investors, who usually have savings to negate the problem of home loan rejection. In addition, demand for medium- and high-end projects are less affected by the country’s economic performance compared to economical projects; together with the prosperity growing in their locations, medium- and high-end projects unaffected rising prices also take their rent prices higher, however, this only applies to new projects. Comparing to old projects with lifetimes between 5-9 years, rent prices in new projects have grown higher by 10-20%, and up to 30-40% compared to those established for over 10 years. Overall, people tend to choose new projects over old ones due to greater facilities and innovations.

Dropping prices of condominiums in Bangkok’s peripheral areas
The expansion of Bangkok’s mass transit system into peripheral areas has prompted many developers to acquire land plots in those areas – while the prices are still low – to launch condominium projects in both low-rise and high-rise. This creates excessive condominium supplies as the demand in these areas are still scarce – especially those locations far away from the inner city. Knight Frank Charter (Thailand) found that Rattanathibet and Tiwanon are the zones to be worry about: there are a lot of unit surpluses, the competition is very high, and the low absorption rate is forcing cuts in both purchasing price and rental price in each project.

Future mass transit lines are locations to keep an eye on for real estate activities

While Rattanathibet and Tiwanon seem fruitless at the moment, some of the Bangkok’s peripheral areas look opportunistic. Knight Frank reveals that future mass transit zones: North Green Line (Mochit – Kukot), Yellow Line, and Pink Line, still have low supplies of condominiums – hence, low competition and sufficient purchasing and rental demands. In addition, Rama 3 is one of the appealing zones regarding its view of Chao Phraya River and proximity to reach Silom and Sathon CBD; rent price in Rama 3 could be raised up to THB 20,000 per month for a 1-bedroom unit.

It is important to know who your target renter is whether you are an expert or inexperienced investor. If your target are salary earners or foreign expats, condominiums in CBD with proximity to a public transit would be an ideal choice; this zone shows no sign of slowdown and gives you a substantial rent price, unlike Bangkok’s peripheral areas which are quite unreliable at the moment.

The content is written by Araya Siripyak, a content writer at DDproperty.com. For more information, please contact araya@ddproperty.com

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Properties in Thailand with features appropriate for senior citizens are poised for growing demand as buyers begin thinking about the comforts they want in a home during their golden years.

The uptick in demand will benefit those properties offering convenient services, senior-friendly surroundings, and increased social opportunities.

DDproperty, Thailand’s number one property portal, noted the potential growth in demand for senior housing in the latest version of its bi-annual Consumer Sentiment Survey. Between the second half of 2016 and the first half of 2017, there was a growth of 5% among people reporting personal concerns about their living situation in old age. DDproperty anticipates growth again of at least 5% in the next survey.

“We predict that the demand for senior housing will continue to grow in our sentiment surveys every six months. This is creating an opportunity for property developers,” said DDproperty Country Manager Kamolpat Swaengkit.

“We know that some property developers have already moved in this direction. We see this as a major trend in the property industry in Thailand, and we will be watching this situation closely.”

Globally, a set of factors is coming together to create the need for privately run senior housing. These factors are also very much in play in Thailand.

According to the World Bank, 11% of Thailand’s population was 65 years old or older in 2016, compared to 5% in 1995 and the bank forecasts that, by 2040, 17 million Thais – or more than a quarter of the population – will be over 65.

• Condo for rent near the senior nursing home

Traditionally in Thailand, children have taken on the responsibility of looking after their parents and live in the same homes together. But these traditions are changing, and people in Thailand, and across the ASEAN region, are more open to the idea of senior housing today.

In addition to this domestic trend, there is a growing number of foreign aging citizens – including Japanese, Chinese and European retirees – looking for senior homes in Thailand. The country indeed offers numerous advantages when compared with its neighbours: world-class healthcare, relatively low living costs, friendly culture, tropical weather, and easily obtained retirement visas.

A few senior housing projects have already been launched and more will open across the country. The Government is planning to set up elderly centres in the country within the next five years.

Financed by the Elderly Fund thanks to a bill approved by the Cabinet last August, these centres will aim at promoting quality of life and work for the senior population. Not to be outdone, the private sector has also started to launch senior housing projects in places like Pathum Thani, Bangsaray, Koh Samui, Chiang Mai, and Phuket.

“The significant increase of the Thai elderly population, the change in traditions, and global demand for comfortable senior living means that Thailand needs more property for seniors,” said Mrs. Kamolpat. “Conservatively, we estimate a need for 800,000 units or more units of senior housing over the next two decades.”

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Sentiments regarding Bangkok’s real estate market show concerns about the near future due to economic factors, but express an optimistic outlook for growth in property value over the next five years, according to the results of the H1 2017 Consumer Sentiment Survey, released by DDproperty, Thailand’s number one property portal.

The survey looks at sentiments among Bangkokians, primarily first-time home buyers and upgraders, for the first half of 2017.

A majority of those surveyed (49 percent) expect real estate prices to rise by up to 10 percent in the next five years, with another 14 percent expecting prices to rise more than 10 percent. However, in addition to long-term optimism, more than 60 percent of survey respondents indicated price sensitivity today given current worries about economic growth.

“We see mixed sentiments in the survey – with people focused on economic pressures today, and expressing concerns about an over-priced market in Bangkok,” said Kamolpat Swaengkit, Country Manager of DDproperty, a subsidiary of the PropertyGuru Group. “But we also see very strong long-term optimism about the Bangkok market, and we attribute this to recognition that urbanization will continue in Thailand. This will drive demand and, ultimately, make Bangkok one of the best cities in the region to buy property, and in particular a condo.”

Consumer Sentiment Survey

The survey revealed that buyers continue to prioritize location when considering a condominium purchase in Bangkok. Ninety-four percent of survey respondents indicate location as the primary factor in their buying decision. Infrastructure, amenities and price per square meter also factor significantly in buying decisions.

A majority of those surveyed would like to see the Thai government take proactive steps to manage the real estate market. Nearly 60 percent of those surveyed said they would like to see the government address affordability issues.

“From a regulatory standpoint, we believe survey respondents liked things such as a first-time buyers program, the elimination of housing transfer and mortgage fees – and we believe people may also be seeking relief in challenges of obtaining a mortgage,” said Ms. Kamolpat.
Overall, Thai sentiments regarding the real estate market in Bangkok are trending slightly downwards from a satisfaction rate of 68 percent in 2015, 62 percent in 2016 and 57 percent for the beginning of this year.
 
When asked about their intention to purchase a property in Bangkok in the next six months, 43 percent of the respondents are optimistic and consider buying a residential property. The majority prefers both newly developed and resale properties – and condominiums especially.

Even with the mixed feelings about the short-term environment in Bangkok, survey respondents indicate a strong preference to invest close to home. When asked about their intent to purchase a condo overseas, less than one percent said they would do so. The vast majority said they would make their next purchase in Bangkok.

The survey, conducted every six months sampled over 500 respondents in Bangkok, and over 3,300 respondents across the region.

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Second-hand homes are one of the property types classified as a nonperforming asset (NPA). An NPA is a property seized by the bank when the borrower does not repay the loan for over 90 days. The property is then sold to an asset management company through an auction, who subsequently sells it to consumers through either another auction or a general purchase.

There were 46,358 second-hand homes transferred to consumers in the first 9 months of last year out of the total of 134,319 residential properties transferred during this time, according to the Real Estate Information Center (REIC). The total value of the second-hand homes transferred in the same period was THB 107.98 billion. The total value residential properties’ transfer during this time was THB 327.42 billion.

Meanwhile, Sukhumvit Asset Management states that the level of nonperforming home loans has shifted higher. Nonperforming loans account for 3 to 4 per cent of all loans in the overall bank system. And nonperforming assets with a combined value of THB 60-70 billion were brought to sale at auctions last year.

Last year, in addition to higher rejection rates, nonperforming loans increased significantly as a lot of buyers failed to finish paying off home loans. This is partly a consequence of the low down payment requirements from developers with some not collecting any sort of down payment at all. The absence of a down payment made the monthly payments higher and, therefore, difficult for buyers to keep paying.

This year will see more nonperforming assets sold by financial institutions and asset management companies, due to the new Land and Building Tax that will be enforced in 2018. These assets, however, will see prices fall due to a greater number of supplies available in the market for consumers to choose from. Nonperforming assets this year will include a great number of second-hand homes, which are ideal for those consumers with a limited budget who are seeking a home. Second-hand homes are less expensive than a new house, but there are some concerns that you need to consider before buying one. Here is a checklist to see if the second-hand home you’re looking at is worth buying.

Among the 5 points in the above infographic, conducting a house inspection in person is the most important. You need to check throughout the house including the electrical system, water system, furniture, ceiling, and house structure. Impairments in any part of the house will incur maintenance costs, which can add up. You might even find the total cost to eventually be higher than purchasing a new house.

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