Developers should be more cautious about launching new condo supply next year, as many negative factors will affect local demand, and the Chinese – the largest foreign buyer market – will also slow down their purchases.
Phattarachai Taweewong, senior manager at property consultant Colliers International Thailand’s research department, said there are many negative factors affecting the property market next year. “A rise in interest rates will have an impact on local demand,” he said. “Those buying for their own use, as an investment or for rent, will have a higher burden. They may slow their purchases.” The rental yield for a condo unit is only 3.5-5% per year. If interest rates rise, buying a condo for rent will not be as attractive for many investment buyers, particularly in the lower to mid-priced segment, who traditionally use mortgages to buy a unit. “Investment buyers may think twice, as the yield they get will not be worth the investment”, said Phattarachai.
The new lending curbs that will take effect on April 1 will be another key factor affecting investment buyers because they will be required to pay a higher down payment, he said. The general election scheduled for early next year and the land and buildings tax, due to take effect in January 2020, will also have an impact on the property market next year, suggested Phattarachai. He said the property sector in 2018 was very hot, with big growth in new condo supply and heavy sales from the Chinese market.
– Bangkok Post