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Thai Condo End Users Can Finally Smile This Year

Posted by admin on March 30, 2019
| 1

This is the year when condominium end-user buyers can smile; with many developers saying that they will concentrate on clearing their completed but unsold condominium inventory in response to weaker demand, partly due to the Bank of Thailand’s stricter mortgage requirement policy for 2nd and 3rd homebuyers.

The residential market this year will be more driven by end-user demand, with fewer investors or speculators compared to recent years.

Many developers said they will focus more on low-rise residential new launches with single detached houses and townhouses, rather than condominiums this year. The low-rise residential market is entirely driven by Thai end-users, not buy-to-rent investors, foreigners or speculators.

CBRE expects to see a significant increase in new low-rise housing projects, raising the level of competition in this segment.

The condominium market is going to be slower this year. Condominium developers, instead of planning many new launches, will concentrate more on unloading their built-but-unsold condominium inventory, completing buildings, transferring titles to existing purchasers, and selling remaining units that are under construction.

CBRE believes the condominium market is going to be driven mainly by the end-users; people who buy units to live in themselves. There will be a lower level of speculative buying of off-plan condominium units to resell before construction completion.

Buy-to-rent investors will be more selective because the number of expatriates, which is the main source of demand for the central business district (CBD) rental market, did not increase, nor did the expatriates’ rental budgets.

The reason that end-user purchasers should be cheerful is that many developers are going to offer impactful incentives to purchase, including some significant discounts and aggressive promotional campaigns.

Purchasers will be able to see a range of completed projects in their preferred locations and compare completed products, rather than rely on the brochures and show units of under construction developments. They can see exactly what they will get, making the comparisons much easier.

The discounts will mainly only be available in buildings with unsold inventory; and CBRE does not expect a fall in prices across the whole market. In fact, the opposite is the case with prices still rising in the most sought after, prime, CBD condominium developments.

Overall, the market cooling measures will be positive in the longer term, preventing the buildup of an excessive bubble and allowing real demand to take over from speculative demand.

There will still be new off-plan launches at every level of the market, but the developers will be more cautious and increasingly focus on domestic end-user purchasers in the entry and mid-level market. This means they will have to provide a product that people want; in terms of size, design, and specification; in their preferred locations at a price they can afford.

Source: CBRE Thailand

One thought on “Thai Condo End Users Can Finally Smile This Year

  • on May 21, 2019

    Well, you are certainly right about China’s vacancy rates. But then again, I wouldn’t want to be investing in the real estate market there right now. Would you? After all, pretty much everyone agrees that the market is long overdue for a correction. The only real question is whether the bubble will completely burst, as it did in Japan in the early 90’s, or whether the correction will be more gradual.As for Bangkok real estate it might indeed be a good investment right now but I have not really researched the matter much as I don’t have a lot of surplus cash lying around at the moment. And as I mentioned in a previous post, when I retire in 5 years or so I will be buying a condo to live in rather than just purely as an investment property. The reason for this is that I will need to remodel whatever I get to suit my high-end modern tastes and I can only do this if I am the owner. I could probably find some rentals in my price range that I like in Bangkok of course but I don’t really want to live there. You see I’ve spent most of my life living on the coast here in California and so I need to be near a beach somewhere when I retire. Sure, I absolutely LOVED living in Tokyo for 5-years but I was also working at the time and I was going out to nightclubs almost every night of the week as well. As a retiree though with no job to go to everyday I just can’t see living even in Tokyo, much less Bangkok.If I were to invest in the Thai real estate market however I do agree that Bangkok would probably be a better choice than Pattaya. As far as living in Pattaya is concerned however I have to say that I don’t absolutely hate the place the way nearly everyone else seems to. In fact, I actually enjoyed living there. It wasn’t nearly as nice as living in Phuket was of course but I really liked how close it is to Bangkok. And this was important because I was dating a LOT back then and I liked the fact that girls from Bangkok could easily and cheaply come to visit me on weekends. Although, by the time I retire I might just look too old to have any chance with any of the girls that I would actually want to date, so my proximity to Bangkok might not be as important in the future.

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