Thailand a Homebuyers Market with Low Interest Rates, Gradual Price Increases

Real Estate Press Releases Tuesday November 21, 2017 14:16
Bangkok--21 Nov--Par2Goal

The Thai property market remains buoyant as the economy continues its slow recovery, with increasing supplies providing greater opportunities for new homebuyers, the inaugural DDproperty Property Index revealed today.

DDproperty, Thailand's No.1 online real estate portal, launched the Property Index for Thailand today to help homebuyers make an informed decision in making one of their biggest, and most expensive, purchases. The DDproperty Property Index crunches vast amount of data to provide comprehensive insights on residential property, including prices, trends and seller optimism. In the first phase, the research focuses on Bangkok.

During the third quarter of 2017, the DDproperty Property Index (Bangkok, Price) reached 199, a 5 percent increase from the second quarter of this year, highlighting the ongoing growth in the Thai market since the start of the year. The modest growth is further proof that the property market is gradually recovering from Thailand's economic slowdown and weaker purchasing power in the mid to low-end segments caused by rising household debt.

"We're cautiously optimistic about the Thai property market and believe there are opportunities for sellers, but particularly for buyers given rising supply levels and the low interest rate environment which is expected to persist for some time," said Kamolpat Swaengkit, Country Manager for DDproperty, which each month helps more than three million Thais find a home.

PROPERTY PRICES, SUPPLY ON THE RISE
The Index tracking residential prices increased 13 percent year-on-year during the third quarter, bringing growth over the past two years to a remarkable 53 percent.
Condominiums continue to command the most attention from homebuyers, with the condo price Index hitting 219 in the third quarter, continuing an upward trend from the previous three-months.

During the same period, the DDproperty Property Index (Bangkok, Price) booked robust growth in Chatuchak district with a 10 percent increase quarter-on-quarter, while there was a 7 percent rise in Phra Khanong district during the quarter.

Property supply in Bangkok has also continued to rebound after a difficult start to 2017, increasing 5 percent in the second quarter of this year and an even stronger 14 percent in the July-September period.

Supply volume during the third quarter hit a record high on the DDproperty Property Index (Bangkok, Supply), with a 20 percent increase from a year earlier. Active launches by developers since the beginning of 2017 have been a trigger for rising supply.

"Supply levels are quite high, although buyer demand remains soft as a result of Thailand's slow economic recovery together with a lack of government stimulus measures," Kamolpat said. "This has had an impact on the confidence of buyers, with many adopting a wait-and-see attitude."

CAUTIOUS ECONOMIC OUTLOOK

While Thailand's economic outlook remains soft, there are some areas for optimism: the ongoing 2015-2022 transport infrastructure and development plan; steady interest rates at 1.5 percent; and continuing growth in foreign tourists.

DDproperty also expects residential property prices to appreciate further, albeit at a tentative pace, thanks to infrastructure mega-projects development, along with possible government economic stimulus to boost spending and consumer confidence.

Foreign demand for property in Thailand is also expected to provide a strong uptick in residential prices, particularly with the Finance Ministry looking to allow foreigners to lease land for residential purposes for up to 50 years, compared to the existing 30-year limit.

"While the current real estate environment is somewhat optimistic for people looking to sell their property, there are numerous opportunities for buyers to tap into. Although prices may continue to rise, buyers can take advantage of low interest rates along with competitive promotional campaigns that developers offer to woo buyers," said Kamolpat.


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