After three years of disappointing results, there are signs that the condo market in Bangkok is making a comeback. Over the last six months of 2022, demand has grown markedly among real estate applicants both domestically and abroad, and in January it remained high.
Demand for apartments in Bangkok from foreign buyers increased by 48.6% in the second half of 2022 compared to the first six months of the year, while domestic interest increased by 29.5% over the same period.
Demand for houses and condominiums in Bangkok was almost the same between January and August, with the latter noticeably declining in the last four months of last year. This continued in January 2023, when there were much more requests for condominiums in the Thai capital made through the Dot Property Group web site network than for houses.
There are several notable reasons why condos in Bangkok are making a comeback. The resumption of tourism in 2022, as well as the growth of household consumption and private investment had a positive impact on the real estate market. The same thing happened with government measures to reduce transfer and mortgage fees.
In addition, many of Bangkok's planned public transport lines are nearing completion. According to the Thai Mass Rapid Transit Authority, the Orange, Yellow and Pink lines are more than 90 percent ready, and trial runs of all three lines are expected to begin in late 2023 or early 2024.
The increase in demand for condominiums in Bangkok last year is a positive development, but perhaps not a panacea for the sector. According to the Real Estate Information Center, the offer still far exceeds the interest, the added projects must have a clear target buyer in mind, otherwise they risk getting lost in the sea of unsold properties.
It is important to note that this does not mean that interest in the housing market in Bangkok will fall. On the contrary, demand here has been stable throughout 2022 and seems to have remained at the current level. The more limited supply has also affected the sector, with several homebuilders reporting strong sales of their launches.
They returned in 2022 and seem to be on the same trajectory for the first two months of 2023, there are several problems. Rising interest rates, inflation and geopolitical conflict may negatively affect the market next year.
There is also a curious case of Thai baht, the rate of which has fluctuated greatly over the past 12 months. The increase in demand for condominiums abroad in Bangkok coincided with the fall of the national currency against the US dollar at its lowest level in the last five years. It strengthened by the beginning of 2023, but the situation has changed again.
However, this is not all bad news. Tourism is developing at full speed: it is expected that this year the number of arrivals will be about 20-30 million people. The opening of China will help in these efforts and increase Thai exports in 2023.
For developers, new launches this year will continue to focus on housing projects where there is a better balance between supply and demand. Those who have unsold apartments will hope that the growing interest in the apartment market in Bangkok will help them in their attempts to get rid of these apartments.