As Thailand desperately seeks a way out of its political morass and restore the economy, inward investment and international tourism, there are signs that opportunities exist in Bangkok’s condo market for buyers of condos. With a huge supply of new units in the pipeline, the market is offering buyers supplementary bargaining power through variety and choice. In addition, developers are now offering discounted prices that are bundled in with promotion packages.
The uncertainties that surround the country’s political and economic climate is hoped to be short-lived after six months of protests, which should in theory temporarily remove speculators from Bangkok’s condo market, leaving it with real demand from owner-occupiers and investors. Last year there was talk of a property bubble but this will ease throughout the year as average condo prices flatten out.
As the Bangkok real estate sector correlates with Thailand’s economic dynamics, it also reflects the country’s downgraded economic outlook. There will be more than 120,000 units that are expected to complete in the next three years and although many developers announced their intentions to shift their focus towards provincial markets and lower-risk alternatives, Bangkok is expected to bounce back once the politicians have agreed on political and electoral reforms to get the country back to its semi-democratic state with elections.
Although political uncertainty has not yet stabilised, there are many who believe that the change in the developer focus will provide increased bargaining power for condo buyers, allow developers to acquire new land at more affordable prices and diminished concerns over the condo bubble, leading to increased market confidence.
With many developers cautious about Bangkok’s condo market, we expect the number of new projects launched this year will be significantly lower than last year. The outcome of these developments is that land price increases will flatten out and the overall economic slow-down will create opportunities for the less risk-averse or are armed with large amounts of cash to acquire land in Bangkok.
Overall, we believe that Bangkok’s condo market will remain resilient and present many opportunities for investors, although it will almost certainly not be at the levels reported in 2013.
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