The Thailand property market recovery can’t fully begin until the country’s borders reopen to overseas arrivals, although CBRE did find a few silver linings in a recent report. In its Thailand Real Estate Market Outlook 2021, the consultancy revealed that the luxury residential market in the Kingdom continues to be active and this should carry over into 2021.
“Based on the number of CBRE’s transactions in 2020, the selective luxury residential market is still in high demand from both end-user buyers and investors with high purchasing power especially for branded residences and luxury housing, but decision-making has become longer,” Khun Aliwassa Pathnadabutr, Managing Director of CBRE Thailand, stated. Supply of large units in the super-luxury segment where sales have been slow in the past will become more active this year.”
CBRE believes that the Bangkok residential market will continue to be sluggish as both domestic and foreign buyers delay their decisions until the current situation becomes clearer. It was also noted that Thailand property market recovery won’t start until borders reopen and more is done to support the market as a whole.
“Foreign buyer interest, especially from Chinese investors, to invest in Thailand remains across all segments but the volume of foreign sales will recover when they can return to the country,” Khun Aliwassa. “Sales promotions together with effective government stimulus are needed to attract foreign buyers. CBRE expects to see a more effective stimulus plan that covers wider aspects which will better support the residential market in 2021.”
Market conditions force developers to slash prices
While the Thailand property market recovery isn’t expected to start in earnest this year, the continued presence of a buyers’ market will support sales once more. According to CBRE, unit discounts in completed buildings between 15 percent to 30 percent have been rolled out by developers looking to clear stock and bring in much needed revenue.
“The percentage of discount to close deals varies subject to the affordable levels of target customers. For new projects, discounts of 5-10 percent with realistic prices have proved to have good feedback from the customers who still have demand to buy a unit but have less purchasing power,” the Thailand Real Estate Market Outlook 2021 explained.
That being said, some developers have prices that are not achievable in the current market situation and may need to implement further reductions. CBRE points out that the key for many homebuilders will be finding price points that are with the budget of local buyers who likely be their primary source of customers in 2021.