Analysts from the Thailand Real Estate Information Center (REIC) summed up 2021s early data to give us some information on the Thai property market in December. Let’s look at how the pandemic affected the Thai housing market and what forecasts are for 2022.
COVID-19’s Impact on the Thai Property Market
The pandemic in 2020-2021 seriously affected the Thai economy as a whole and the property market in particular. Buyers are not more selective about their and their family’s safety. So many people look for homes away from major urban centers and closer to nature. Lifestyles have also changed. Many working people began switching to remote work and so needed homes with more space and rooms. Entrepreneurs working in the property market had to reorganize and change how they did business. All of this causes the housing sector to also transform.
Demand and buying activity
The REIC states that the share of low-rise homes increased by 55% over the past 2 years compared to the pre-pandemic period. But, condominiums still make up the top market share at 63.6% of all properties offered. These market results show that the demand for low-rise houses increased in 2020–2021:
- townhouses by 116%;
- commercial real property - 100%;
- mansions by 21%.
During the pandemic, most property buyers focused on the safety, health protection, price and infrastructure of the property. That’s why they often prefer large developers.
Most people believe that housing should be energy-saving to reduce costs; it must comply with safety standards and the living space design must meet working needs.
So, the demand for new features has increased. After all, it’s precisely these living spaces that can give you a high level of comfort with up-to-date technologies and high environmental standards. The increased demand was followed by an increase in prices. So, according to the Bank of Thailand (BoT), condominium prices rose because of the increased demand for detached houses and townhouses in the third quarter of 2021. In this same period, detached houses jumped in price by 10% and townhouses by 8% compared to the third quarter of 2020.
Index of confidence in the property sector
On January 12, 2022, analysts at the Thailand Real Estate Information Center (REIC) reported an increase in the confidence index for residential construction in December 2021 from businesses. The reports say that the index increased by 52 units compared to the previous quarter.
What should we expect in 2022?
REIC experts think that the demand for Thai property as well as the number of sales will stabilize by the end of 2023.
The market is already showing signs of recovery. This is because loan-to-value (LTV) control measures were eased. The Bank of Thailand (BoT) eased the conditions to get a loan. This means that more homebuyers can get a loan. Before you could only get financing for 80% of the property’s cost but you can now get 100%. This program is valid for loan agreements from October 20, 2021, to December 31, 2022. These measures are designed to support and stimulate the housing market in Thailand. According to the State Housing Bank, the situation will have gone back to normal by the second half of 2022.
From December 2021, the number of move-in ready homes started to slowly increase, including detached houses and townhouses. Many new projects are planned to be launched in the 3rd and 4th quarters of 2022.
The chairman of the executive committee of Supalai Public Company Limited said that Thai property will be better by 2022 than in the previous 2 years. Developers' attention will also spread to provincial markets where new holiday homes and premium properties will be constructed, among other things.