DDproperty, Thailand's leading real estate marketplace, reveals that the real estate market in the final quarter remains sluggish due to the overall economic conditions that have yet to recover following the prolonged recent wave of COVID-19. This has resulted in a continuous decline in the housing price index, contrasting with a 7% increase in the supply index, reflecting a persistent slowdown in purchasing power. Single-family homes continue to be popular as they meet the needs of buyers looking for actual residence (Real Demand) during the COVID-19 period. However, despite the easing of lockdown measures, consumer purchasing power has not yet returned. There is hope that targeted government assistance for the real estate sector, combined with foreign investors after the country reopens, will help revive purchasing power in the real estate market as the year ends.

The latest data from the DDproperty Thailand Property Market Index shows that the housing price index in Bangkok has decreased to 178 points from 183 points, a 2% drop from the previous quarter, marking the lowest price index since Q4 2016. The condominium price index continues to decline, down 2% from the previous quarter and 11% year-on-year, in contrast to single-family homes, which saw a 6% increase from the previous quarter and the same percentage year-on-year. The townhouse price index remained stable from the previous quarter but decreased by 1% year-on-year. The pandemic has driven growth in the price index of low-rise housing as consumers increasingly focus on low-rise projects. Additionally, the significant absence of buyers and investors, especially foreigners, from the market for an extended period has led to a lack of activity in the condominium market.

Meanwhile, the supply index, or the number of residential units in the market, has increased to 458 points from 428 points, a 7% rise from the previous quarter and a 10% increase year-on-year. Notably, the supply of low-rise projects has seen the most significant increase as property developers shift focus to this market segment to meet changing consumer demand for housing. The supply index for single-family homes increased by 10%, and townhouses by 8%. In contrast, the condominium supply remained stable from the previous quarter as developers focused on promotions to clear existing stock rather than launching new projects. However, several developers are beginning to reintroduce new condominium projects towards the end of the year to cater to the returning foreign purchasing power after the country reopens and to respond to the improving consumer spending confidence.

Ms. Kamolphan Saengkit, Country Manager of DDproperty, stated, "Although this year has seen a continuous vaccination campaign nationwide, the severity of the pandemic remains unexpected. The economic situation and consumer purchasing power continue to be affected, prompting all businesses to adjust their strategies to be prepared for every change. It is expected that the policy to reopen the country will be another crucial hope to help revive the Thai economy, especially in the real estate market, to grow again, as purchasing power from foreign investors has been absent from the Thai real estate market for a long time. Additionally, the government's measures to attract wealthy foreigners, along with the new draft law on foreign ownership of real estate and land, are all positive factors that will help attract foreign investors to consider real estate in Thailand more. It will be interesting to see how the government manages these measures to achieve quick and maximum benefits.

Thai consumers themselves still require support from the government, both in building confidence through vaccination campaigns and effective pandemic control measures. At the same time, if the government introduces additional assistance measures for the real estate sector, such as extending the reduction of transfer fees and mortgage fees, along with raising the housing price ceiling to no more than 5 million baht, it will further accelerate the purchasing decisions of middle to lower-income consumers. This is in addition to the positive factors from the Bank of Thailand's temporary relaxation of regulations on housing loans and other loans related to housing loans (Loan-to-Value: LTV). These targeted assistance measures will help drive growth to recover more quickly, aligning with the overall consumer confidence index in September 2021, which rose to 42.1 from 37.2 the previous month, marking the second consecutive month of increase, signaling that consumer purchasing power is set to recover again. Furthermore, with current housing prices not being too high, it presents a good opportunity to attract financially ready buyers to make purchasing decisions more easily."

The Condominium Market Still Awaits Recovery
"However, even though the price and supply indices for condominiums have continuously declined in the latest quarter, it does not signal that the condominium market is dying, as there is still demand in the market. Consumers are simply planning their finances more cautiously and waiting for the right time to buy. Meanwhile, property developers are adapting to the uncertainty caused by the COVID-19 crisis by delaying plans to launch new projects and focusing on clearing existing inventory to reduce the burden of maintaining those units. They are also targeting buyers interested in low-rise projects. Condominium owners should consider delaying sales to wait for better returns. Sellers and investors should study consumer housing demands in the COVID-19 era, as not only has the type of housing chosen changed, but consumers are also increasingly looking for residences in the outskirts of Bangkok and suburban areas, as evidenced by the locations where the price index has grown the most each quarter, which are continuously expanding outside the city center," Ms. Kamolphan added.

Spotlight on Promising Locations: Yellow Line BTS Area Drives Property Prices Up. The latest DDproperty Thailand Property Market Index report reveals information on promising residential locations with growth potential in Bangkok. The Yellow Line BTS project is a key factor driving the price and supply indices in several locations to continue growing, creating economic growth opportunities that align with consumer demand for housing outside the city center.

· Wang Thonglang District has become the most promising location to watch, even though it is outside Bangkok's Central Business District (CBD). This is evident from the price index increasing by 6% from the previous quarter. The main factor attracting Wang Thonglang to become the fastest-growing location this quarter is the Yellow Line BTS project from Lat Phrao to Samrong, which is set to open in 2022, reflecting consumer demand for residences that allow convenient commuting by BTS. When considering the supply proportion by price level of each type of residence, it is found that most condominiums and townhouses are priced between 5-10 million baht (35% and 61%, respectively), while single-family homes priced over 15 million baht account for four out of five of all single-family homes in this area (83%).

· Lat Phrao District is another emerging location with the second-highest price index increase at 5% this quarter. The area's development as a commercial hub with shopping and job opportunities has made it a focal point with the potential to become a new business center or New CBD, especially with the Yellow Line BTS project passing through, further increasing demand for real estate in this area. It is another location where property developers are continuously securing land for residential project development. The price supply proportion by price level of each type shows that condominiums priced between 1-3 million baht account for as much as three-quarters of all condominiums in this area (72%), while townhouses priced between 5-10 million baht are the most common at 44%. Single-family homes priced over 15 million baht also hold the largest share, similar to Wang Thonglang, at 44%.

· Sai Mai District, an outer area of Bangkok, is interesting due to the development of transportation projects, including several new roads, along with positive factors from the Green Line BTS project from Mo Chit to Saphaan Mai to Khu Khot, resulting in the price index increasing significantly, ranking third at 5% from the previous quarter. When analyzing the supply proportion by price level, it is found that each type of residence generally has lower price levels compared to Wang Thonglang and Lat Phrao, with condominiums and townhouses priced between 1-3 million baht being the most common at 71% and 75%, respectively. For single-family homes, more than half (51%) are priced between 5-10 million baht.