Knight Frank Thailand Reveals State of Resale Condominium Market in 2020 Remains Stable in Some Areas, with Chidlom - Thonglor Reigning Supreme in Terms of Popularity
Ms. Anchalee Kasemsukthawat, Head of Prime Sales, Knight Frank Thailand, revealed that “The Thai economy has been directly impacted by the global economic slowdown since 2019, along with the Covid-19 epidemic from the beginning of 2020 to present, as well as the ongoing domestic political turmoil. Such factors have caused major shifts in the condominium market. Many owners would like to sell their assets in order to change their investment directions; some have sold assets to have cash on hand. Compared to 2019, this has led to an increase in the supply of resale condominiums in the market.
The supply of resale condominiums remains stable, with a quantity that is similar to that of 2019. Many of the negative economic factors have made price competition among resale condominiums quite high. Most of the buyers this year include Thai investors who have solid footing and cash savings, and they have been waiting to purchase condominiums since 2019. On the whole, buyers view this time as an opportunity to acquire a choice condominium at the best possible price. They are switching from putting their funds in fixed deposits or investing in stocks to buying long term assets; some groups are purchasing property for their own residences as they require the use of more space to meet living needs.
The New Petchaburi to Rama 9 area also saw brisk buying and selling activity as it is a location with convenient transportation options and a concentration of leading offices. The area contains quite a lot of the condominium supply, however, and many operators and investors have had to lower their selling prices. There have been price cuts between new and resale condominiums in order to attract customers with purchasing power, including those who wish to reside in the units themselves as well as those who buy the units to rent them out. As for resale condominiums along the Chao Phraya River, prices have remained stable and there has not been much buying and selling activity.
Meanwhile, an area of concern includes Chatuchak – Ladprao - Ratchada, as there has been a relatively large supply of new condominiums in 2020 and developers offered promotions with heavy discounts. As a result, sellers of resale condominiums have had to adjust and lower their prices as well. The price levels for new and resale condos in this area are very similar, and more buyers decide to buy new condominiums instead.
For the next year, we expect a better outlook in the resale condominium market. At the end of 2020, we started to see signals of improvement from foreign investors who are interested in investing in the prime market in popular locations such as from Chidlom to Thonglor. Although travel to Thailand has not been very convenient for foreign investors, a number of them have decided to buy units without having seen the actual condominiums, and there has been constant buying and selling activity. Most of these expat groups are familiar with Thailand, and maintain good knowledge and understanding of investing.
A positive factor to watch is the government policy that will encourage foreign investors to return to buy real estate in Thailand, with special conditions as proposed by operators. One such example is the Elite Card program that offers foreigners investing from 5 to 10 million baht in Thailand a visa to stay in the country. Previously, the initial investment for this benefit was no less than 10 million baht and a membership fee of 5 hundred thousand baht for a 5-year visa. The COVID-19 outbreak both within and outside the country is also a major concern, as is the overall outlook of the global economy.”