The impact of the COVID-19 pandemic on the real estate business continues, particularly for consumers who are currently lacking purchasing power, feeling uncertain, worried, and postponing large asset purchases indefinitely. Despite developers continuously rolling out strategies, promotions, discounts, and giveaways, they still cannot fully capture customer interest. For those with savings and purchasing power, this period presents a good opportunity to buy assets at lower prices along with various promotions.

Factory Customers Lack Purchasing Power, Leading to a Drop in Transfers Q1/64 in Nakhon Pathom, Samut Sakhon, and Samut Prakan Dropped Significantly

            It is clear that when the stock of houses and condos is slow to move, the heavy impact falls on developers who have to bear significant costs. An analysis by the business loan division of Kiatnakin Phatra Bank has revealed that the third wave of COVID-19 has clearly affected the real estate market, especially in the purchasing power segment related to factory markets, as reflected by the significant drop in transfer rates in three provinces: Nakhon Pathom, Samut Sakhon, and Samut Prakan.
            “Townhouses” have seen the highest drop in transfer rates compared to the same period last year, with Nakhon Pathom experiencing an 88% decrease, while Samut Sakhon saw a 45% drop, and Samut Prakan a 28% decrease, respectively. In contrast, Bangkok saw a decrease of about 10%, which is opposite to the increase of 35% in the “single house” category, reflecting that the real demand for housing still exists, with some customers making purchase decisions and transferring ownership.

            The townhouse market priced below 2 million baht, where the main purchasing power comes from employees in industrial estates or factory groups, is likely to continue slowing down due to direct impacts from uncertain income and new cluster outbreaks in factories.

 

Purchasing Power During COVID Prefers Condos Priced Below 2 Million – Houses Priced 3-10 Million Still Moving Forward

          In the first quarter of this year, the overall new project launches in Bangkok and its vicinity have significantly decreased, with a total of 12,985 new units launched, down by 7,212 units or about 35% compared to the same period last year. This is because operators are starting to adjust their project launches to target specific groups that still have purchasing power and have not been heavily impacted by COVID-19.

The details of the product categories with new units available for sale are as follows:

- Condominiums have 5,857 new units entering the market, down by 15%.

- Townhouses have 4,159 new units available, down by 56%.

- Single Houses have 1,274 new units available, down by 44%.

 

            The newly launched and best-selling products during COVID this year are in the price range of 3-5 million baht and 5-10 million baht, driven by customers who still have purchasing power. The townhouse category is the best-selling new product, particularly in the price range of 3-4 million baht (2-story townhouses) and 5-7 million baht (3-story townhouses).

            Meanwhile, duplex houses priced at 5-7 million baht in suburban areas are an interesting new product as they replace single houses that have increased in price to 8-10 million baht and duplexes above 10 million baht. Areas on the eastern and northern sides of Bangkok, such as Bangna-Srinakarin, Ram Inthra, and Rangsit-Lam Luk Ka (within the eastern ring road) are where townhouse and duplex projects have the most new sales.

            Additionally, the newly launched and best-selling condominiums are likely to see price reductions, particularly in the price range below 2 million baht. The trend of new project launches and the price ranges that are selling well reflect changing purchasing power, with demand expected to contract over the next year, becoming specific to certain groups and expanding only in some areas, especially while the COVID-19 situation remains uncontrolled.

 

Thank you for the information: Business Loan Division, Kiatnakin Phatra Bank