The market is forecast to recover by 15-20% in 2022 with the low-rise housing sector recovering the fastest.
The Thai Center for Real Estate Research and Evaluation (AREA) reports that the market has declined at the end of 2021 due to the decrease in purchasing power. Foreign investors have not returned to the country yet. Real estate developers encouraged the buyout of old properties and delayed the launch of new ones.
The number of launched housing units decreased by 9.9%, the number of purchased new properties decreased by 7.4%, and the cost of new units decreased by 17.2% from the end of 2020. While the average price of new properties increased by 16.6 %. As a result, the accumulated balance decreased by 2.5% compared to 2021, from 213,728 units at the beginning of 2021 to 211,770 units at the end of 2021. It will take more than 40 months for the complete sale of the constructed units (with the condition that there will be no new unit’s launch at all).
However, despite the fact that the total launching number in the field has decreased among all types of real estate, whether it is a low-rise building or a condominium within 2 years of the Covid-19 pandemic start, the purchase of low-rise housing units still goes well while condominium sales have declined more than twice. This shows that consumers turn to buying low-rise properties. This is the reason why low-rise units are barely affected and likely to recover faster as a result.
The share of sold apartments in the total market supply almost halved, from 46% in 2018 to just 25% in 2021. While low-rise properties, townhouses and separate houses remained at the same level as before the pandemic. Townhouses took 33% and separate homes took 26% in 2018 and 25% each in 2021, indicating that low-rise housing units were hardly affected. Consumers tend to buy more low-rise housing property. Sales reduce initial stock because there are fewer newly launched properties than real estate purchases, causing the decline in unsold market supply over the past few years.
The real estate market saw a decline in new project launches from 2018 to 2021. Only 60,489 new properties were launched in 2021, which is 7.4% less than in the previous year. As a result, the cost of new units decreased by 17.2% since 2020. However the increase in project launches is expected by 15% to 20% in 2022. It is about 70,000 to 80,000 properties which results in a 10% increase in initial costs for new properties, or about 305,389 million THB.