Samma Keetsin
Independent Director, Sena Development Public Company Limited

The author previously presented an article about affordable condominiums at the end of last year, highlighting how the COVID-19 pandemic, combined with the country's economic and political issues, has impacted the purchasing power of the public. This has been a significant factor leading to a decline in new residential property transactions, particularly in the condominium market around Bangkok and its suburbs, as well as in tourist areas.

It has been analyzed that the mid-range to low-end condominium market (or what might be called Budget Condos) is likely to face more challenges than the high-end market. This is because buyers in the upper market tend to have stronger purchasing power, and financial institutions are more willing to extend credit to them. However, in reality, the economic conditions affected by the COVID-19 outbreak in other countries have caused a chain reaction impacting tourism, travel, and related businesses, leading to job losses or significant income reductions for those who previously had relatively high incomes.

Conversely, state banks have significantly increased their new loan disbursements, focusing on providing loans to low- and middle-income earners, which includes buyers looking for affordable housing.

Despite the major negative public health factors, there are still positive aspects for housing priced under 3 million baht. The Ministry of Interior has announced a reduction in the transfer fee from the usual 20,000 baht per million to just 100 baht per million, as well as a reduction in mortgage fees from the usual 10,000 baht per million to 100 baht per million. These measures are currently in effect until the end of 2021, but if the COVID-19 outbreak continues to be severe and the economy remains heavily impacted, there is a tendency for these fee reductions to be extended.

Analyzing the condominium market in the price range of 1-2 million baht, which is said to have more units than any other price range, it is found that most prices cluster around 1,600,000 to 2,000,000 baht. However, condominiums priced under 1.5 million baht are scarce and decrease progressively in the price range close to 1 million baht and below.

These affordable condominiums are an attractive option for residents who are tenants, whether they live in dormitories, apartments, or rented condominiums. When considering purchasing a condominium in any location, if the condominium price is relatively low compared to the rental rates in the market, resulting in a low Price-to-Rent ratio, it becomes more favorable to buy the condominium rather than rent.

For example, if the selling price of a condominium is 800,000 baht, but the rental rate in the market is 6,000 baht per month (or 72,000 baht per year), the Price-to-Rent Ratio would be 800,000/72,000 = 11.1 times. If the rental rate is 5,000 baht per month (or 60,000 baht per year), the Price-to-Rent Ratio would be 800,000/60,000 = 13.3 times.

These ratios are considered very low, making it reasonable for consumers to purchase ownership rather than pay rent every month (in this case, the condominium price is low enough to justify buying for ownership rather than paying rent for 11-13 years without the chance of ownership).

In the current situation where the outbreak remains severe and the purchasing power of the public is low, combined with the limited supply of low-priced housing under 1 million baht or close to it produced by private housing developers, it is encouraging that Sena Development has turned to meet the demand of consumers looking to purchase condominiums in this price range.

Sena Development has branded these condominiums as SENA Kith, with projects currently available and upcoming in various locations across the city, such as:

The units in this condominium brand are approximately 25-27 square meters, with starting prices around 800,000 baht or close to it, including furniture, which translates to a price of just over 30,000 baht per square meter. This is an attractive option for those seeking housing close to urban development and important job centers at a light price point.