In 2019, residential property developers in Greater Bangkok may face more challenges in bolstering sales because purchasing power overall has not fully recovered and there are various economic factors affecting consumers' decision to purchase homes. Under this circumstance, real estate developers may need to tap into consumer segments having strong demand and ability to purchase homes over the next 1-2 years, such as Gen-Y consumers, who want to buy their first homes.
Based on our assessment, we at KResearch have found that Gen-Y consumers, who have the potential to purchase their first homes over the next 1-2 years, are those between ages of 25 and 38 years, earning over THB40,000/month and spending less than 50 percent of their monthly income. Such potential Gen-Y home buyers account for 4.3 percent of the total Gen-Y population residing in Greater Bangkok. They look for homes costing about 2.5 million Baht each in Greater Bangkok.
There is a challenge in penetrating Gen-Y consumers because this consumer segment has diverse needs and there is a price mismatch in Greater Bangkok's residential market. Therefore, property developers wanting to clear up unsold units and having plans to introduce new residential projects may need to increase flexibility in their project design and development, as well as focusing on cost management so that they can increase sales to the potential Gen-Y home buyers.
Based on our survey results, KResearch projects that demand for homes in Greater Bangkok from the potential Gen-Y home buyers may reach 42,000-50,000 units during 2019- 2020. However, the number of units that will be granted home loans and sold will hinge on conditions and qualities of the borrowers, so close attention must be paid to the number of homes actually purchased by Gen-Y consumers.