The buyer’s market for Bangkok condominiums will continue as developers focus on selling empty units. According to Knight Frank Thailand, condo prices throughout the Thai capital fell in the fourth quarter of last year with the situation unlikely to change in the coming months.
The consultancy found that Bangkok condominium prices sank by five percent in the Central Business District. A decline of 15.4 percent was recorded in the city fringe while prices dropped by 13.2 percent in suburban Bangkok. Many homebuilders decided to slash prices hoping to sell unsold stock and boost liquidity.
Additionally, developers have delayed new projects in order to focus on sales efforts. Condominium launches in Bangkok fell by more than 60 percent last year and that trend is expected to carry over into 2021. Colliers International Thailand estimates that only 20,000 units will hit the market this year. If that prediction holds, it would be the lowest total in 15 years.
These factors are supporting the buyer’s market for Bangkok condominiums in 2021. Overseas investors will find their money going further now and are in a strong position to negotiate.
“At this time, buyers have the power to negotiate and get the best prices,” Khun Pojaman Vorakitpokathorn, Head of Project Marketing at Knight Frank Thailand, said. “Operators reduced the prices of completed projects that are ready for occupancy and organized promotions with attractive prices to speed up sales and unit transfers. Some projects were able to close sales by offering lower selling prices than other projects in the same location. On the whole, the condominium market in this period represents a true buyer’s market.”
When will the Bangkok condominium market recover?
There had been initial optimism that the Bangkok condominium market would start to recover by the end of 2021. However, the third wave of COVID-19 means that will likely be delayed until next year.
“The condominium market may see a rebound in mid-2022, which is expected to be a time when the COVID-19 epidemic is under control,” Khun Pojaman stated. “The market still needs to wait for the epidemic situation to ease and travel between countries to resume before it can recover, with the return of foreign purchasing power and employment back up in accordance with the country’s economic direction.”
There have been reports of Chinese investors trying to buy condos as residences or investments in the future even though they are unable to enter the country at the moment. Knight Frank Thailand reported that these potential buyers are stating their interest through the embassy and brokers in China.
This interest was corroborated by CBRE Thailand who noted that more could also be done to attract foreign property buyers in 2021.
“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. Sales promotions together with effective government stimulus are needed to attract foreign buyers,” Khun Aliwassa Pathnadabutr, Managing Director of CBRE Thailand said. “CBRE expects to see a more effective stimulus plan that covers wider aspects which will better support the residential market in 2021.”
