The property market will slow this year amid negative factors such as new mortgage lending requirements, an uptrend in interest rates and the prolonged US-China trade war, according to developers and experts.
Atip Bijanonda, president of the Housing Business Association, said the USChina trade dispute may have an impact on the Thai economy. If the economy is soft and interest rates rise, consumer confidence will drop. “The economic situation has a strong impact on the condo market, as condo buyers need confidence when buying a condo, the process for which usually takes 24-30 months to complete,” Atip said at a seminar on the housing market held by the Real Estate Information Center (REIC).
He said the general election will affect the economy if the government has no stability or has a mix of parties without unity. Government policy on infrastructure projects will dampen investor sentiment if it discontinues, is frozen or slows down. Vichai Viratkapan, the REIC’s acting director-general, said property developers should check residential stock in each location where they want to develop a new project before making a decision. “The new lending rules will boost the absorption rate to 4.8% from 4.5% in the first half this year, but it will drop to 4.2% in the second half as the new rules take effect on April 1, 2019,” Vichai said. Nalinrat Chareonsuphong, managing director of property consultant Nexus Property Marketing Co, said condo developers may need to rely on foreign buyers, as the new lending rules start to affect some buyers.
“Foreigners buy Thai property due to lower prices, higher yields and capital gains, and to use as a second or holiday home,” she said. “Some want to move capital from their home country and escape unattractive interest rates.” According to Nexus, new condo supply totals 55,000-60,000 units a year, while demand this year was 50,000 units. Of the amount, 10% was acquired by foreigners. Chinese buyers were the main overseas buyers, with strong growth in 2017-18. Growth from Chinese will slow because many found the prices they paid to be higher than what Thais pay. – Bangkok Post