In the final stretch of 2020, the Thai housing market has started to receive some good news with regard to progress in the development of COVID-19 vaccines, and Thailand's better-than-expected economic performance in 3Q20., based on data provided by the Office of the National Economic and Social Development Council (NESDC, These factors are positive for the housing market.. Nonetheless, the spread of COVID-19 has affected the full-year 2020 statistics, as evidenced by the number of newly-launched residential units and the transfer of property ownership in the Bangkok Metropolitan Region– both of which have seen a significant decline.
The market trend for the housing industry in 2021 seems to have passed its trough. However, it could still face numerous challenges ahead, stemming from the economic recovery, purchasing power and the COVID-19 situation both at home and abroad. Additionally, the market will remain under pressure amid the sheer number of unsold housing units. This is particularly true for the amount of unsold townhouses, which has accelerated over recent months, leading many property developers to become somewhat cautious about launching more housing estates. In light of this development, KResearch projects that the number of newly-launched residential projects in the Bangkok Metropolitan Region will likely be in the range of 72,000 to 75,000 units, or a contraction of 1.4 percent to slight growth of 2.7 percent in 2021.
On the other hand, Thai consumers' purchasing power is expected to maintain a level close to that of 2020 since the economy is just emerging from the doldrums amid the COVID-19 crisis. As a result, purchasing power has yet to return to normal, and worries over job security still prevail. Meanwhile, demand from foreign buyers may recover, albeit to a limited extent due to limitations in international travel and second pandemic waves in major countries worldwide. These factors will likely affect the confidence and purchasing power of any potential overseas clients. Competition within the housing market in each country could also influence foreign buyers' purchasing decisions. Against this backdrop, KResearch assesses that the booking rate in the Bangkok Metropolitan Region in 2021 will be in the range of approximately 71,000 to 76,000 units, or a decline of 5.3 percent to slight growth of 1.3 percent. At the same time, the transfer of property ownership within the Bangkok Metropolitan Region is projected to remain at a stable level close to that of the previous year, approximately 185,000 to 189,000 units, or a contraction of 1.1 percent to slight growth of 1.1 percent. Nevertheless, close attention must still be paid to the government's stimulus packages, which may contribute to a positive business environment for the housing market, going forward.
To conclude, KResearch expects the real estate market in 2021 to be on a path of gradual adjustment given unfavorable market conditions. For this reason, property developers should still exercise caution with their investments while also relying upon intensive marketing campaigns as the housing market continues to face many limitations.