There are a number of reports about what’s in store for the Bangkok property market in 2019. These predictions range from the classic consultancy speak of “cautiously optimistic” to doom and gloom. Decoding fact from fiction can be a painstaking task.
Ultimately, it’s still too early to make any predictions about the Bangkok property market in 2019. However, we can take a look at a few things real estate buyers should be aware of as we carry on into the new year.
2019 Bangkok property market: 4 things to consider
New loan regulations and higher interest rates
New policy from the Bank of Thailand sees greater down payment requirements for property purchases more than THB 10 million or anyone taking out more than one mortgage. What’s more, interest rates could climb higher this year making it difficult for first time homebuyers. Developers are worried about both of these hurting sales in 2019 and need to be cautious in the short term.
“Developers should be more careful of their liquidity, as company expenses will be fixed but earnings may miss their targets. Sales and transfers will not be as good as expected. They may need capital reserves for healthier cash flow,” Atip Bijanonda, President of the Housing Business Association, told the Bangkok Post.
Even more niche projects
Some developers have already taken to crafting more themed developments such as Raimon Land’s The Lofts Silom which unsurprisingly only features loft-style units. However, at least one real estate expert believes homebuilders should take this trend one step further in 2019.
Nexus Property Marketing Managing Director Nalinrat Chareonsuphong told local media that firms building condos in Bangkok should develop products for specific demands. She gave examples of a condo being designed for workout lovers or pet lovers along with senior-friendly condos as possibilities.
The Thailand general election, which was planned for February but has since been pushed back to later this year, will also impact the Bangkok property market. Nearly every major real estate consultancy predicts that demand and supply will shrink during the run up and immediate aftermath of the elections. However, as long as there is no political unrest or sweeping new policies in regards to real estate, the long-term impact will be negligible.
Infrastructure work continues
The infrastructure push in Bangkok is set to carry on this year, even though no new lines are set to open. Work continues on the yellow, pink and orange public transit lines with the brown line monorail project now approved by the government earlier this month. Meanwhile, the government also approved land use for the extension of the Airport Rail Link that will eventually connect Don Mueang and Suvarnabhumi airports in Bangkok with U-tapao airport in Pattaya.
“Looking forward, there will be no new lines opening in 2019 but property owners and investors will be looking forward to 2020 when the MRT Blue Line extension, SRT Light Red Line and SRT Dark Red Line, as well as the BTS Green Line Mor Chit-Khu Khot extension, are all scheduled to open,” James Pitchon, Head of Research and Consulting at CBRE Thailand explained in an articled published in the Bangkok Post.