This article, Are Bangkok condos making a comeback?, appears in the latest Dot Property Group Report. Click here to download your copy.
After three years of underwhelming performances, there are signs the Bangkok condo market is making a comeback. Demand rose noticeably among both domestic and overseas property seekers during the last six months of 2022 and continued to be strong in January.
Bangkok condo demand from foreign buyers picked up by 48.6 percent in the second half of 2022 when compared to the first six months of the year while domestic interest increased by 29.5 percent over the same time period.
Demand for houses and condo units in Bangkok was nearly even between January and August with the latter noticeably pulling away during the final four months of last year. This continued in January of 2023 when inquiries for condominiums in the Thai capital made via the Dot Property Group network of websites were far greater than those received for homes (See Graph Right).
There are a few notable reasons as to why Bangkok condos are making a comeback. The resumption of tourism in 2022 as well as upticks in household consumption and private investment all had a positive impact on the real estate market. So too, did government measures reducing transfer and mortgage fees.
Additionally, many of Bangkok’s planned public transport lines are close to completion. According to the Mass Rapid Transit Authority of Thailand, the Orange, Yellow and Pink Lines are more than 90 percent complete with trial runs of all three expected to start in late 2023 or early 2024.
The rise in Bangkok condo demand last year is a positive development but may not be a cure-all for the sector. Supply continues to be far greater than interest, according to the Real Estate Information Center which added projects must have a clear target buyer in mind or risk becoming lost in the sea of unsold units.
It’s important to note that this does not mean the Bangkok housing market will see interest fall. On the contrary, demand here was steady throughout 2022 and appears to have settled at its current level. A more limited supply has also impacted this sector with several homebuilders reporting brisk sales for their launches.
Watch: 4 things to know about Thailand property investment in 2023
What’s in store for the Bangkok condo market in 2023?
While Bangkok condos made a comeback in 2022 and appear to be on the same trajectory over the first two months of 2023, a few challenges exist. Rising interest rates, inflation and geo-political conflict could all negatively affect the market over the coming year.
There is also the curious case of the Thai baht which fluctuated widely over the past 12 months. The rise in overseas Bangkok condo demand coincided with the currency being at its weakest level against the US Dollar in five years. It strengthened to start 2023 but that has reversed once again.
However, it’s not all bad news. Tourism is full speed ahead with arrivals expected to come in around 20-30 million this year. China’s reopening will aid in those efforts while boosting Thai exports in 2023.
For developers, new launches this year will continue to focus on housing projects where there is a better balance between supply and demand. Those with unsold condo supply will hope the increase in interest across the Bangkok condo market assists in their attempts to offload these units.
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