While uncertainly still surrounds Thailand’s economy, Knight Frank Thailand reported that developers plan to be aggressive when it comes to project launches in Bangkok during the second half of this year. While competition is high, they are pinning their hopes on non-registered migrants in the city looking to buy or rent condominium units with investors purchasing these units and then renting them out to this group.
Knight Frank Thailand’s research revealed the Bangkok condominium market grew in the first half of 2016 despite concerns about the economy and rising household debt. However, it was not an easy time for developers as high mortgage rejection rate s made it extremely difficult to transfer units in the low-end segment. Those units priced below THB 1.5 million saw 35 percent of buyers fail to secure a loan approval from the bank. It is expected that developers will learn from this and focus their energy elsewhere.
“Most developers are now focusing on targeting the middle-income market segment that is earning between THB50,000 to THB100,000 per month because this segment has sufficient purchasing power to buy,” Potjaman Vorakitpokathorn, director – project marketing, residential department, Knight Frank Thailand stated. “They also find it easier to get the bank’s approval for a mortgage than those in the lower income market. As such, we expect to see a greater number of newly launched condominiums during the second half of this year. Demand should improve from the first half of the year due to better economic conditions. The selling price is estimated to climb up, especially in the CBD area.”
It was noted that new supply from the peripheral areas dominated the market with 75 percent of new launches now coming in these areas as land scarcity and land costs in the CBD continue to be obstacles for developers.
Another thing developers are likely to do in a bid to boost condominium sales this half is implemented campaigns for free transfer and mortgage fees. Even with demand expected to improve, this may help sway some buyers.
