Sophon Phonchokchai, president of Thai Center for Real Estate Research and Valuation, said that many people are concerned about the possibility of lower real estate prices due to the unstable economic situation in the country.
There are reasons to think so. Thailand's economy, according to World Bank, grew more slowly than in neighboring countries before COVID-19. And the recovery is likely to be slower than in other ASEAN countries. The situation was aggravated by the crisis between Russia and Ukraine, which led to an increase in prices for construction materials.
At the moment, approximately 1.2 million residential units for a total of 2.6 trillion baht are for sale on the real estate market. There are about 400,000 from developers and another 800,000 from secondary housing.
Sophon Phonchokchai noticed that in the past 2021, housing prices from developers did not fall. In the secondary market, the price has not increased significantly. There can be an increase of only 1-2% per year and they usually cost about 70% of the cost of a new home.
However, apartments in good areas, which previously offered a guaranteed rental profit of 6-8% per annum, may not be so profitable for investors now. It is assumed that the rent for these apartments can be reduced by 10-15%, since it is difficult to find a new renter.
The expert said that the current situation in the real estate market is not critical and there will be no such price reduction as during the economic crisis of 1997-2001. If you thought to wait for the price reduction to buy real estate, then you should not postpone.