Since the beginning of 2021, most residential property developers have postponed the launch of their new projects due to unfavorable market conditions and a large accumulation of unsold residential units, forcing operators to adapt their business strategies to the market conditions. According to the Agency for Real Estate Affairs (AREA), the total number of new residential units launched in the Bangkok Metropolitan area was 25,257 units during the first half of 2021, a decline of 15.9%YoY, with a significant decrease in the launch of new condominiums. Meanwhile, developers are focusing more on the low-rise market, which has a real demand for housing, a short construction cycle and easy-to-manage risks. Residential property developers have launched numerous campaigns offering heavy promotions to entice buyers, which present a good time for those ready to buy, leading to a rebound in sales, although sales are still lower than they were before the COVID-19 outbreak. According to AREA, pre-sold residential units in the Bangkok Metropolitan area grew by 37.7%YoY during the first half of 2021, while the cumulative number of unsold residential units dropped to 214,000 units in the first half of 2021, or down by 5.7% from the end of 2020, which was a good sign for the residential market.
Looking into the remainder of 2021, KResearch perceives that while challenges and high fragility remain, the COVID-19 pandemic has begun to stabilize and the market still has support from a measure introduced to reduce residential property ownership transfer fees, which will end on December 31, 2021. However, the recovery of the residential property market will take longer to return to pre-COVID-19 levels due to the impact of the COVID-19 pandemic. KResearch views that the launching of new projects is likely to remain cautious for the rest of 2021. New housing launches in the Bangkok Metropolitan area may reach approximately 41,000-48,000 units, the lowest level in nearly 18 years, while pre-sold residential units are projected to be 57,000-63,000 units during 2021, a continued decline from last year. Although the sales volume improved during the first half of 2021, the COVID-19 pandemic may drag down sales volumes during the second half of 2021.
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