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Bangkok Housing Market Outlook, 2020
AREA Press Release No. 42/2020: January 23, 2020

Dr.Sopon Pornchokchai, Ph.D. Dip.FIABCI, MRICS
President, Agency for Real Estate Affairs (AREA)

Dr.Sopon Pornchokchai, President, Agency for Real Estate Affairs which is the foremost and largest real estate information and valuation centre in Thailand conducted the survey of real estate markets on monthly and quarterly basis.  The latest survey by end 2019 found 2,359 projects still had available units for sale in the Bangkok Metropolitan Region (BMR) in 2020.  Around 1,987 of them had over 20 units which implied that they were still very active.  This meant that Bangkok was the most active real estate particularly for housing in the ASEAN region.
 

 

In 2019 alone, some 480 projects were newly launched in the BMR.  This figure was more than that in 2018 where 457 projects were launched.  However, the number of units launched in 2019 at 118,975 units were some 5% less than the launching in 2018 at 125,118 units.  In terms of value of the development of the newly launched projects in 2019, it was Baht 476.911 billion (USD 15.636 billion) which was some 16% less than that in 2018 which was worth at Baht 565.811 billion (USD 18.551 billion). 

Considering pricing, in 2019, a housing unit offered was Baht 4 million or USD 131,148; however, the price was Baht 4.6 million or 150,820 in 2018.  The price was down for 12%  That the prices were down was due to the fact that the economy might not be growing significantly.  The GDP growth of Thailand was 3% which was one of the lowest growth.  Not only less-developed countries to Thailand, Malaysia with a higher GDP per capita or more advanced than Thailand still possessed a higher GDP growth than Thailand.

While the number of newly launched units was 118,975 in 2019.  The number of units absorbed or bought in the market was only 99,862 units for housing in the BMR.  In 2018, the number of units bought was 120,557.  This implied that the demand was decreased by 175.  Although property developers and the government tried very hard to promote the sales, it was still ineffective.

Another worry was that there were still some 218,881 units still available on the hand of the developers at the end of 2019.  It was only 119,768 units in 2018.  This was an increase of 19,113 units.  According to AREA’s survey, every year the absorption was 110,000 units.  Therefore, the 218,881 units could totally be absorbed within two years if there was no new supplies.
 

 

Dr.Sopon expected that in 2020, the number of units launched could be the same as in 2019.  The more the government stimulated the markets to buy the housing units, the more new production will be added into the markets.  Many would buy for speculation because currently the saving interest rate was only 1% The proportion of speculation from local and foreign buyers might exceed 40% of the demand.  Therefore, danger could be foreseen.  Prior to any new launching of a project, an intensive study with scrutiny is a must.