There are a lot of speculations on what’s in store for the Bangkok property market this year. The forecasts cover the classic consultancy speak of being positive to a possible lower opinion. Stating fact from fiction can be difficult to take.
On the other hand, it is still too premature to state forecasts of the Bangkok property market this year. There are some of a real estate buyer needs to look into as the real estate market in the city takes place.
Even if the demand for condominiums to be built has become lesser, there is a growth in the building of condominiums in Bangkok. For a fact, the number of newly launched condominiums has gained from 8000 to more than 15,000 per quarter during the years 2017 and 2018. In 2009, the number of condominiums went down to lesser than 100,000. In 2018, the number gained 550,000 condominiums more. In this lieu, the average price of condominiums has become twice the normal rate in 2004 – 2018, which has an amount of THB 60,000 to THB 120,000 per square meter. Also, the number of serviced apartments grew lesser than 500 during 2001. While, in 2018, there were an exceedingly of 21,000 serviced apartments that was employed. It is predicted to increase to 25,000 by the end of 2021. Compared to other countries, this phenomenon works really well for investors.
There are 4 things to consider in the Bangkok property market:
- Fresh loan regulations and progressing interest rates
The new policy of the Bank of Thailand oversees an improved down payment requirement for property which were bought more than THB 10 million or persons having more than one mortgage. Furthermore, interest rates could grow massively this year, which poses difficulties for the first time homebuyers. Condominium developers are worried about these poor sales in 2019 and need to be careful of them in the future.
For a fact, condominium developers should be more precise of its liquidity, when expenses remain steady and earnings may not be met. The sales and transfers may not be helpful at all. The developers may need capital reserves to gain positive cash flows.
- Gain added niche projects
There are developers, who have already built themed developments (like Raimon Land’s The Lofts Silom,) which offer loft-style units to buyers. On the other hand, real estate experts believe that buyers should take one step further this year.
Developers of condos in Bangkok should build products catering to what is expected by the buyers. For example, there are condos designed for the workout lovers, pet lovers and amenities for the senior citizens.
- Election Factors
The country’s general election will influence the Bangkok property market. It has been planned to take place in February, but was pushed back in date. All most all of the major real estate consultancy believes that the demand and supply of real estate ventures will get lower during the actual and aftermath of the elections. The long-term impact on real estate is negligible, as long as there is an absence of political unrest or implementing of new policies.
- Infrastructure Work Remains
The infrastructure venture is expected to be implemented this year, even if no new lines are seen to open. Work remains at hand on the pink, orange and yellow public transit lines with the brown line monorail project now implemented by the government earlier this year. Additionally, the government also implements the land use for the extension of the Airport Rail Link, which is built to connect Don Mueang and Suvarnabhumi airports in Bangkok and U-tapao airport in Pattaya.
In 2019, there will be an absent of new lines opening, but condo owners and investors should expect new transactions in 2020. This is the time when the BTS Green Line Mor Chit-Khu Khot extension, the MRT Blue Line extension and SRT Light Red Line and SRT Dark Red Line are predicted to open.
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