Bangkok’s residential market will improve next year as supply and demand will be more balanced, while foreign buyers, particularly Chinese, are still interested in Thai property, according to property experts.
Suphin Mechuchep, chairperson of property consultant JLL Thailand, said potential future demand for Bangkok’s residential market include foreigners whose demand would increase due to remote working flexibility.
“Those working at the office for three days and at home for two days may create new requirements,” she said.
“Growing demand will also derive from the gig economy with gig workers from other countries and digital nomads around the world.”
She said Bangkok continues to be an attractive option for foreigners, mainly attributed to the lower cost of living.
However, demand from foreigners will be higher once the borders are fully opened.
“We should prepare the public health system and pandemic controls like last year, while at least 80% of people in Bangkok and major destinations should be vaccinated in order to build foreign buyers’ confidence in a short period,” Mrs Suphin suggested.
She said a longer visa can boost both property demand among foreign buyers and wellness, medical hub and longevity business. The work permit process should also be less complex.
To boost sales from foreign buyers, developers should aim for the right target markets.
From the past several years, major foreign buyers in Thailand are Chinese and Singaporeans, said Mrs Suphin.
Kamolpat Swaengkit, country manager of property portal website DDproperty.com, said Chinese buyers were interested in Thai property because the annual yield was over 5% which was higher than those in their home countries.
“Many Chinese are looking for a second home for their retirement. Some send their children to study in Thailand while expanding their family business in the country. Some want to relocate to do business in Southeast Asia,” she said.
All of them love Thai culture and lifestyle, while the cost of living is also lower than in many countries.
Price ranges that capture this market are those lower than 5 million baht a unit which accounted for 54%, followed by 5-10 million baht (16%).
Rathawat Kuvijitrsuwan, head of research and consulting at property consultant CBRE Thailand, said Asia-Pacific investors had more intentions to buy properties in 2021, compared with 2020.
“Preferred regions for cross-border investment include developed Asian countries like Singapore, China and Japan, followed by emerging countries like those in Southeast Asia,” he said.
Mr Rathawat said the most preferred sectors for investment were led by industrial, logistics, warehouses and data centres, followed by office, residential, hotel and retail.
“An oversupply is not across the board,” he said. “There is still strong demand for senior living and places near universities. Tapping these markets with the right prices may offer a higher percentage of success.”
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the housing market should be able to resume next year with local demand driving the recovery.
“A drop in newly launched supply this year will result in a market balance,” he said. “With the decrease in new supply, stock will eventually be absorbed and a positive sign of new supply will start next year.”
REIC forecasts at least 80,000 units of new residential supply being launched in Greater Bangkok next year, up from 53,693 units expected this year.
New residential supply launched in Greater Bangkok in the first half declined 37%.
The largest drop was in condo with a decrease of 42.5% as developers froze new condo projects and shifted to low-rise houses.