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5 Aug 2019

Real Estate and Construction

Consumer purchasing power of residential property in Greater Bangkok has not fully recovered, leading to a high number of unsold units in 2019 (Current Issue No.3014)


          The residential property market in Bangkok Metropolitan Region in the remainder of 2019 still faces several challenges, prompting developers to adopt a cautious approach in launching new projects and adjust their business plans in response to the market conditions in 2H19.   Some have shifted to projects with affordable prices to attract mass consumers. The popular locations remain the areas surrounding the connection points of mass transit routes in outer Bangkok.

           The lackluster market reflects a drop in purchasing power of consumers, while household debts per GDP stay at a high level, especially among consumers with fragility. Additionally, business factors are not conducive. Hence, buyers who plan to purchase property projects for investment both short term and long term may delay their decisions to wait and see the situation develop. Some real buyers may benefit from the government's measures, prompting them to speed up their purchasing decisions.  

            Due to such a grim business environment, the property developers' business plan adjustments and the lackluster purchasing power of both Thai and foreign buyers, KResearch forecasts that the unsold inventory of residential property units by the end of 2019 will be around 196,000201,000 units, or between a contraction of 1.9 percent and a mild expansion of 0.6 percent from 2018. Nonetheless, close attention should be paid to the government's stimulus measures which may be announced in 2H19 and the marketing campaigns by the operators late this year before the Land and Building tax takes effect on January 1, 2020.