The Real Estate Information Center (REIC) reports that the real estate sector will continue to face both positive and negative factors in 2022.
Positive factors in 2022 include:
- Government measures to stimulate the real estate market (the reduction of commission for acquiring rights of ownership to 0.01%, including secondary housing units).
- The Bank of Thailand’s (BOT) measures to lower LTV will help to increase the number of purchase deals for buy-to-live and buy-to-invest housing units.
- The bank's liquidity is sufficient for new loans.
- Entrepreneurs still have promotions to reduce real estate prices.
Negative factors or risks that need to be monitored include:
- Interest rates are likely to rise.
- The COVID-19 epidemic continues, the Omicron is spreading.
- Household debt is high at 90% of GDP.
- Incomes of the population may recover slower than expected.
- Increasing debt (NPL) of financial institutions.
- Construction costs rise due to the price increase of construction materials.
- The tourism economy has not recovered yet, the tourist’s flow is still low.
Based on the analysis of the situation, it is expected that more new projects will be launched in 2022 compared to 2021. There still will be more low-rise units than condominiums. The reason is the population demand for more living space, while the condominium market will recover gradually. And rising land prices force entrepreneurs to build condos to match the purchasing power.
In addition, there are still promotions and discounts to motivate buyers. At the moment, foreigners are not the main client base for condominiums, the main clients will be Thais from generation Y and Z groups.