Since the implementation of the Bank of Thailand’s stricter mortgage requirements, the number of speculators has decreased. In the long run, we do feel that this is positive for the health of the Thai property market. There were instances whereby local Thais were holding on to multiple properties just because mortgage requirements were extremely lax. With fewer speculators, the threat of a huge bubble forming has decreased although we will only know the true effect of the stricter mortgage requirements perhaps a couple of months later.
The residential property demand should be driven by two types of buyers:
- The residential end-user buyers
- The long term investor
Those looking for a huge turnaround in profit should not be in Thailand and mainly Bangkok property market. The times where you could “flip” an option has disappeared as prices are not going to increase so dramatically as before.
In turn, the number of new project launches in Bangkok is going to be significantly reduced as developers focus on clearing their excess stock, completing construction of buildings and transferring titles to buyers.
Buy-to-rent investors should take a more selective stance when it comes to selecting a unit because the number of expatriates did not increase nor did their rental budgets. Buyers should focus on properties in central Bangkok, located within the Central Business Districts (CBD) and within close proximity to the train station. They should also look for condominiums with a good mix of facilities that will attract expatriate tenants. This will be a good year for property buyers as price growth moderates and buyers will have time to understand the development and the area before committing to a property.
The editorial team at Invest Bangkok Property