Since the global outbreak of COVID-19 in 2019, the real estate market has never been the same everywhere, including in Thailand. Owing to the seemingly never-ending coronavirus pandemic, Thailand’s real estate market has suffered huge setbacks. This is evident in the several housing projects yet to be completed, house ownership yet to be transferred, and several unsold condominium units preventing the launch of new projects. All these are the consequence of increased household debt and reduced consumer purchasing power. Since the 4th quarter of 2020, prices of real estate properties had been decreasing despite several measures. Between the first and third quarters of 2021, the Price Index of properties fell from 190 points to 178. 2022 however, offers a brighter future.
An overall analysis of previous years shows that while the prices of condominiums fell by 11% in 2021, the prices of single-detached buildings gradually increased by 6% in 2021 over 2020. This is because people and consumers’ appetite is gradually changing towards single-detached or horizontal housing. Many companies are now allowing their employees the right to work from home several times a day per week and people working from home want more space.
Another factor to put into consideration is the supply of property in the real estate market. In 2021, condominiums witnessed the highest increase in the supply index. By the third quarter of 2021 alone, supply had risen from 399 points to 458 points. Based on pricing, it is evident that consumer purchasing power has been immensely affected by the epidemic as condos that sold for less than THB1 million experienced a 78% growth rate. Those that sold for 1 to THB3 million grew by 42% while those that sold for 10 to THB15 million recorded no growth, instead, they recorded a 1% reduction.
The common consumer trend is that most people are wary of buying houses at the moment owing to the uncertainty that the pandemic brought about. Many people end up postponing their intention of buying a house. Another factor inhibiting consumer purchases is financial instability unlike before the pre-pandemic era. To make matters worse, the political instability of the country is yet another major bedeviling factor potential real estate often considers. Despite all these, do you know that analysts and experts have forecasted a steady growth for Thailand’s real estate market in the year 2022?
Government efforts such as the lifting of strict COVID-19 restrictions, widespread availability of COVID-19 vaccines, reduction in transfer of ownership fees, provision of mortgages for properties below THB3 million, and the introduction of 100% mortgages by the Bank of Thailand (BOT) in its loan-to-value (LVT) offer foreseeable growth in 2022 real estate market even though prices are currently declining at the beginning of the year. If you’ve got the money, buy and keep. Single-detached houses and suburbs where the BTS and/or MRT is planned to have expansion could also witness incremental growth rates.