[International] Bangkok Property Market Polarizes: High-End Residences Resist Decline, Mid-to-Low Priced Apartments See Continued Weak Demand
RtiTalk 小編1d ago
The recovery pace of the real estate market in the Greater Bangkok area of Thailand is uneven. High-end residences continue to attract foreign buyers, while mid-to-low priced apartments face pressure from weak purchasing power and increasingly stringent loan approvals. New housing unit launches in Bangkok have been declining year by year since their peak in 2022. Real estate agents report a significant decrease in potential customers, but developers emphasize that quality projects remain competitive.
According to a report by the Economic Intelligence Center (SCB EIC) of Siam Commercial Bank, the number of new housing units launched in Bangkok and its surrounding areas has been decreasing annually since its peak in 2022. It is projected to fall to 39,000 units in 2026, a 5% year-on-year decrease, indicating a continued reduction in developer launches.
Thai real estate agent Supawat Racheeva stated that the Bangkok property market is currently relatively quiet, especially for mass-market apartments on the outskirts of the city center, which are significantly impacted in sales.
Cooling Agent Leads and Rental Demand
Supawat, who has been in the real estate business for 10 years, said, "If I get 4 clients in a week now, I feel very happy." He noted that in the past, he had about 2 to 3 potential clients daily, but now the customer base has significantly decreased, affecting his income.
He added that banks are becoming stricter with mortgage approvals. Even with a good credit history, loans may be rejected due to existing debts.
Supawat gave an example of a client who wanted to buy a second home. Despite having good credit, the client could not obtain a loan due to personal and company debts. He said, "Small business owners and freelancers are particularly vulnerable because their monthly income is not fixed, making it harder to meet bank loan requirements."
The Nation once cited a survey report indicating that 56% of respondents have no plans to buy a home in the next 5 years, the highest proportion in the four years of the survey. Consumer home-buying budgets are also shifting towards residences under 3 million Thai baht (approximately NT$2.91 million), reflecting limited household purchasing power.
The Bangkok Post recently reported that recent floods in Bangkok have weakened home-buying confidence, causing three condominium projects, totaling over 1,000 units, originally scheduled for launch in the third quarter, to be postponed.
Furthermore, the rental market has also seen changes. Supawat mentioned that in the past, demand for apartments in Bangkok's city center was strong, with Japanese corporate employees being a significant source of tenants. However, since the beginning of this year, when inquiring about vacant units in buildings, he frequently finds apartments available for rent.
He said, "5 years ago, when I called to inquire about apartments, most were already fully occupied." Now, vacancy rates in some areas are around 20%, a stark contrast to the past.
According to Supawat's observations, some Japanese companies and their supply chains are beginning to shift to Vietnam, Indonesia, and other locations, which may also affect local rental demand.
Supawat revealed that due to a sharp decrease in income, he is currently pursuing a health industry program at university, hoping to enter the health tourism industry and generate other income.
High-End Residences Remain Attractive, Developers Optimistic About Shifting Demand
In contrast, Samatkom Tangvivat, Assistant Vice President of Project Development at Thai real estate developer Sansiri, remains optimistic about the development of the Bangkok property market, especially the high-end residential sector.
Samatkom stated that after a period of market adjustment, the overall market has stabilized this year, with sales and transfer data improving since the second quarter.
He cited data released in September by the Real Estate Information Center, which shows that condominium sales in Bangkok and its surrounding areas have increased by about 20% year-on-year, indicating market improvement, particularly in the high-end segment.
Based on Samatkom's market observations, there are approximately 350,000 condominium units in inventory in Bangkok. About 70% of these are inactive inventory held for over 5 years, with only about 30% being actively competing in the market. He believes that if only active inventory is considered, the market absorption is not as bad as imagined.
Samatkom pointed out that Sansiri's new projects typically sell about 30% during the pre-sale phase and have the potential to sell out within 3 years after handover. He believes, "Consumers now place more importance on whether a product meets their lifestyle needs, rather than just looking at whether the price is cheap."
He added that consumers' lifestyles and needs have changed since the pandemic, and residential products must adapt accordingly. Sustainable development, ESG, and service quality are also receiving increasing attention.
He said, "They are no longer just considering whether the price is cheap, but are choosing products that meet their current and future living needs."
Samatkom also mentioned that foreign buyers remain an important customer base for high-end residences. This is mainly because Bangkok's cost of living is competitive compared to other international cities, and coupled with medical services, international dining, and convenient transportation, it continues to attract expatriates, digital nomads, and retirees.
Source Link: https://www.rti.org.tw/news?uid=3&pid=238924
How does this article make you feel?
0 people reacted