Thailand’s housing demand this year expects to drop 10% from 2020

The property market will be concentrated with large developers as smaller companies struggle to compete with their inferior cash flow 

Developers will incur higher costs from the temporary lockdown of all construction sites. KhajonwitSomsri/Shutterstock

According to Bangkok Post, poor homebuyer sentiment has caused Thailand’s residential housing market to remain stagnant and will take some time to rebound.  

Kessara Thanyalakpark, managing director of SET-listed developer Sena Development Plc, said the high infection curve in the third wave has resulted in very different attitudes towards the pandemic and this year’s lockdown, compared to 2020.  

“The country is in a worst-case scenario with a possible peak of 20,000-30,000 infections per day in August and September before declining,” she said. “That is the official record, but in reality, it might hit 50,000.” 

The nation’s current COVID-19 crisis will cause business slowdown, minimal recovery in the labour market, and lower household incomes, all of which impact purchasing power.  

The market will see the domination of large developers due to their superior cash flow. This trend has been relevant over the past two years and is expected to continue. 

“Housing demand in the short term will drop as financial institutions hardly release mortgage loans when unemployment rises to a new high,” she said. “Together with soaring household debts, home purchases will be more difficult.” 

Moreover, this year’s housing demand is expected to decline by 10 percent from 2020, while developers will incur higher costs from the temporary lockdown of all construction sites.  

More: Thailand’s recent outbreak causes property prices in Q3 to slide

Meanwhile, the upward trend of steel prices will affect the condominium segment.  

“The only positive factor would be a downward trend in interest rates, which could accelerate some homebuyers’ decisions,” she said. “In the medium term, the housing market will pick up as urbanisation remains lower than the world’s average.” 

The Property Report editors wrote this article. For more information, email: [email protected].