Condo Market in Thailand the ‘Worst in a Decade”

Thailand’s condominium market is likely to end up 25 per cent in the hole, as the Baht continues to soar. Its the most severe situation in 10 years, according to the executive director of Property Perfect.

A total of 454,814 residential condo units across the country were left unsold last year, with a value of $41 billion.

Chinese investors have historically made up the bulk of foreign property buyers in Thailand. But their presence has waned as China’s economy slows and capital controls limit outflows. Condo sales are highly sensitive to economic conditions of the buyer’s home country.

Wongsakorn Prasitwipat said the loan-to-value (LTV) measure imposed in April; a sluggish economy and the baht’s appreciation have also sapped foreign demand for property.

“The LTV measure has had the most impact on condo sales in the past 10 years,” he said. “The government should introduce measures to stimulate market recovery, which should take approximately a year.”

To boost sales in the last quarter of this year, Property Perfect will unveil a scheme called “Condo of the Year.” Book a condo to win a trip to Japan.

“One Million Houses” Project

“This campaign is also expected to hit Bt1.5 billion in sales from our Bt6 billion worth of stock,” Wongsakorn said.

Its “Yuruay Condo” scheme, part of the Government Housing Bank’s “One Million Houses” project. Its aims to target buyers beyond just low-income earners to the employees of private firms. With monthly salaries between Bt20,000 and Bt30,000. Each unit sells for Bt899,000.

“Property Perfect plans to focus on horizontal low-rise condo projects next year. Avoiding the economic risk and secure a quick return on investment,” Wongsakorn told the the Nation.

It’s eyeing Srinakarin-Romklao and New Krungthep Kreetha roads, also considered a desirable location for a condo by Sansiri, SC Asset and AP due to the convenient commute between downtown and Suvarnabhumi Airport.

Analysts also say the market is entering an equilibrium stage. Believing prices will be adjusted to a more realistic level. The Finance Ministry cut its economic growth forecast, predicting the slowest expansion in three years.