KASIKORN RESEARCH CENTER (KResearch) has concluded some projections on the real estate market in 2009. In our base case, housing completions in the Bangkok Metropolitan Region (BMR) in the year to come may experience a 14.8 percent contraction YoY (due to large supply of unsold units and housing sell-offs of some developers to cut costs). This is despite the new government's economic policy to revive business sentiment and consumer confidence that may result in new property investment in 2H09. In the worst case, the housing market may be hit by delayed home purchases amid the political strife that will affect the economy, and in particular, consumer confidence and the income security of the general public. Worse, economic recovery may be hindered by the global financial crisis that may worsen next year, which would then derail new foreign investment into real estate. In that case, housing completions in BMR could shrink by 19.9 percent YoY.
In 2009, the real estate market will likely encounter intense competition. Almost inevitably, price-cutting may be the main theme in the market where developers may try to dispose of unsold units to enhance liquidity and reduce operating costs during a battered economy with low consumer confidence and ebbing purchasing power. Among the strategies employed would be price reductions and sales promotional extras, e.g., free decorating and furnishing deals. Co-promotions with financial institutions may be adopted by property developers to offer special interest rates to homebuyers.
Housing demand in the year to come will be unlikely to see a fast recovery. Demand may come from affluent consumers for dwelling purpose. Meanwhile, homebuyer preferences are changing in the prevailing market environment amid heightened competition and oversupply. It could be said that it is now a buyer's market where homebuyers have a glut of available property at lower prices (in addition to the benefits gained from the government's real estate purchase incentives); however, they seem in no great haste to buy. – KResearch
Trend for BMR Housing Completions, 2007-9
|
|
2007
|
2008 (est. *)
|
2009 (est.*)
|
|
Number (Units)
|
|
Housing completions in BMR
|
72,808
|
71,000
|
57,500-60,500
|
|
Housing estates
|
32,741
|
26,500
|
21,500-22,500
|
|
Condominiums
|
14,816
|
22,500
|
18,000-19,000
|
|
Custom-built homes
|
25,251
|
22,000
|
18,000-19,000
|
|
Growth (%)
|
|
Housing completions in BMR
|
4.5
|
-2.5
|
-19.9 to -14.8
|
|
Housing estates
|
9.3
|
-19.1
|
-18.9 to -15.5
|
|
Condominiums
|
16
|
51.9
|
-20.0 to -15.6
|
|
Custom-built homes
|
-6.2
|
-12.9
|
-18.2 to -13.6
|
(Compiled from the data on housing estates, condominiums and custom-built homes)
*estimated by KResearch
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