Thailand Real Estate Market Overview 2022 from an Agent’s Perspective

This year, I rarely see anyone summarizing the overall real estate market.

Come on… Agent style #fanfeels

Let me share an overview

Based on my experiences throughout the year.

I would like to bring direct experiences

And various sources

To put them together here.

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Starting with

#Condo #HighRise

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For condos in the city center,

Over the past 6 months,

Developers have not launched any new projects at all.

It’s quite surprising.

But the outer zones still have some launches.

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Speculator buyers or investors

Have significantly decreased.

From now on, we probably won’t see

Projects opening and selling out

Within a day… it will be more difficult.

Because buyers take more time

To be more selective.

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Buyers start to wait and see the actual unit first,

Instead of queuing to buy a paper booking.

Because I've heard from many

That there have been various lessons learned.

They want to make more cautious decisions.

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Projects with unsold units (backlogs)

Try to push out many promotions.

But they still don't perform well

Due to location + product + pricing.

Buyers still don’t respond well in many areas.

This makes developers have to work harder,

Reduce specs / cut out some options,

Or even accept losses

To maintain cash flow instead.

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For the second-hand market,

It has been quiet since the LTV measures.

Then COVID hit again.

Banks began to tighten

Their loan approval policies,

Making the market overall very quiet.

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More than half of loan applications

Are rejected.

Buyers also don’t dare to use a large amount of cash

For reservations

Or to pay off the remaining balance

To get the house during this time.

#WeWillStartToSeeMoreNonRefundableContracts

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And with various uncertainties,

Especially regarding work and finances,

People are reluctant to take on long-term debt.

They rather delay purchase decisions

And rent temporarily.

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In terms of rentals,

Larger rooms,

One-bedroom units

With more than 30 sqm,

Whether with glass partitions or wall partitions,

Are in demand among Thai people.

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For units with large balconies,

Large living areas,

They are in demand among foreigners.

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A small detail observed is that

Thais prefer new buildings

For image reasons.

Foreigners don’t mind older buildings

As long as they fit their lifestyle.

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Let’s talk about segment.

Location is not what defines segment,

But price does.

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Lower segment

Rental rate below 10,000

Or selling price not exceeding 3 million.

Still the largest customer base.

But also face the most problems.

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Such as payment defaults,

Rental arrears,

Room damages,

Low booking payments,

Installment security deposits,

Or no deposits at all,

Loan rejections.

These make owners and agents

Want to pull their hair out.

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However, in this segment,

Many flipper investors

Play in this market a lot.

Which is good as it helps boost value

And make this market lively.

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Mid-level segment

Rental prices from 12,000-25,000

Or selling price not exceeding 7 million.

It’s quite a sensitive market.

This segment slashes prices the most

Because there are many comparables.

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Combined with owners

Who have poor investment planning,

Unable to hold vacant units,

Forced to release units quickly

To reduce bank installment burdens.

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Mixed with Chinese investors

Who seek cash flow regardless of market price,

Causing massive price cuts.

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Agents holding Chinese investors' units

Can make huge profits,

But it’s like slash-and-burn farming.

As it destroys market prices in the long term.

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Many customers

Like to use super cheap units

As price references,

Until it becomes the market price standard

That is very low.

This makes agents' work harder,

Having to press room owners

To release their units.

I really feel sorry for some owners.

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But in the high-end segment

Rental prices start at 30,000

Selling prices 10 million and above.

They are not much affected.

Because both owners and customers in this group

Are quite financially stable

And have strong careers.

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Price negotiation is merely

A spice to the deal.

Because if they like the unit,

They usually decide easily.

Especially for units with 3 bedrooms or more.

With few remaining products in the market,

Deals close quickly.

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(Many times, customers use the COVID situation

To harshly bargain

With the term "COVID price,"

Causing pain to many owners.

This happens in every segment.)

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Regarding room layouts,

Studio type

Is always a backup choice.

If possible,

People prefer not to live in this type.

Because it feels too much like a dorm.

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But it’s not that this type cannot be rented out.

On the contrary,

After long periods of WFH,

This type becomes desirable for couples

Who live together.

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Because the room type

Has no partition walls to feel cramped.

Some customers actually like this vibe.

Also, it's more affordable than other types.

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Projects with common areas that fit lifestyle

Are increasingly a deciding factor.

Because of long WFH,

Working in the same room,

Often leads to boredom.

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Changing work locations,

Or using common areas for activities,

Becomes a more important factor for demand.

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Locations near BTS

May no longer be a major weight

In demand's decision.

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That’s because

Locations near BTS

Are usually expensive

And room sizes keep shrinking.

Especially in new projects,

Rooms smaller than 26 sqm

Feel very cramped.

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Going a little deeper into the alley,

Or choosing an outer zone condo

For a larger room

At a lower price,

Makes it easier for customers to decide.

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Looking at #LandedHousing

The trend is opposite to condos.

Especially in Sukhumvit area,

You could say #OutOfStock.

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As mentioned above,

Locations no longer need to be near BTS.

Going a bit further into the alley,

Or adding a bit more budget,

From a condo to a townhouse or house,

Makes landed housing

Highly demanded by real demand

This year.

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In outer zones

Whether Srinakarin - Pattanakarn - Bangna - Krungthep Kreetha - Ramintra

Any new project sells out quickly,

Both for rent and sale,

New and second-hand.

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The key to landed housing sales

Is the number of bedrooms and parking spaces,

Which align with family size

Or company members.

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Houses with only one parking space

Are less preferred,

Similar to condo studio type.

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Larger houses

Are increasingly sought after

To be used as home offices.

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A symbol of luxury in landed housing

Is determined by having a private swimming pool.

Whether a large Olympic-size pool

Or a small koi pond,

It adds value to residents more than

Houses without pools or gardens.

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It is clearly noticeable

That if possible, people prefer houses over condos.

Because they want space and privacy.

Only that condos are convenient for commuting,

Due to workplace proximity.

With WFH as a factor,

It clarifies

What people truly want in a residence

And what it looks like.

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Landed housing stock is slow to come out,

Mainly due to land negotiation.

Some developers don’t have their own land bank.

It takes time to negotiate / plan / design

To match customer needs during COVID.

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Infrastructure expansion,

Whether BTS or roads,

Makes outer areas feel less far.

All this leads to

A shortage of landed housing stock.

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#RetailMarket

Needs to do a lot of homework.

Adapting continuously for the past 2 years,

Due to government measures / bank considerations,

Political uncertainty,

Revenue loss from COVID,

Consumer confidence at its lowest ever,

And changing customer behaviors.

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They need to adapt a lot.

One clear trend is

New investments with lower budgets,

Or joint ventures to create new things

That fit the COVID period.

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For #Landlord or #CommercialLeasing,

They may need to revisit old or paused projects,

Review details,

And adjust conditions

To help tenants survive.

Adapt to the current situation

To bring people back to malls.

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#Land

Land remains a

Perpetually potential real estate type.

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Even during COVID,

The proportion between residential purchase

And commercial development purchase

Is not much different.

Beautiful plots in good locations

Are still in demand.

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The width of the road in front of the land

Is the clearest indicator

That adds value to land.

Don't be fooled by prime land

With only a one-lane road.

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But I noticed

Land speculators have decreased.

Likely due to land tax policies,

Causing speculators

To delay decisions.

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For price negotiations,

Smaller plots (not exceeding 200 sq.wah)

Are negotiated at higher percentages.

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Larger plots,

2-3 rai are the most popular.

In my experience,

Lat Phrao,

Ramintra (not beyond Watcharaphon),

And Bangna are the most asked about.

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Overall, the market has just started to improve

Around last November.

Due to lockdown easing,

And because it was time

For inspectors to make housing decisions.

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For rentals,

Shorter contract terms.

From at least 1 year

Now feels too long.

4-6 month terms are increasing.

Usually, short-term rentals

Have higher rates.

But customers are willing to pay.

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Contract details

Are now more focused,

But also more flexible.

With force majeure clauses

Added to better protect rights.

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The latest trend worth mentioning

Is using crypto as part of

Real estate transactions.

At this point, no one knows

How important crypto will be in the future,

Or whether it will be widely accepted.

But it’s an interesting channel.

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#HotelMarket

Has been severely impacted / disrupted / forced to adapt.

No foreign demand for 2 years.

Adapting to longer-term stays,

Or lowering rental rates,

To attract more Thai customers.

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But the hotel market

Recovers quickly.

Looking at occupancy rates,

They’re higher than last year.

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Sandbox projects,

Though not as successful as expected,

Show that

Phuket is a key gateway

That can help tourism recover quickly.

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Overall for hotels,

They rely heavily on measures.

If owners have liquidity problems,

They often use sale-and-leaseback

To raise cash for other investments,

Rather than fully selling to change business.

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This shows

Hotel owners

Still believe in the hotel's comeback

When things return to normal.

Because tourism

Is still a highly lucrative business

For Thailand.

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#OfficeMarket

Is also heavily impacted.

With negative net take-up

For 3 consecutive quarters

(meaning more space returned than newly leased),

Due to operators unable to bear rental costs,

Moving to cheaper locations.

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Rental rates may not move much,

But promotions / discounts

Are used to attract tenants to stay.

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If asked whether WFH

Will become a permanent normal,

The answer is no.

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Ultimately,

Everyone will return to the office.

Only some departments

May not need to be in the office all the time,

Or have WFH quotas

For certain days per month,

As a cost-saving measure for companies.

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Other trends like ESG

Environment Social and Governance

Start setting Net Zero targets,

Or carbon credit trading,

To show environmental responsibility.

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Reducing environmental impact

Gives new buildings an advantage.

Old buildings must adapt too,

Otherwise, they may look bad in the long run.

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Regarding agents' situation,

Our colleagues,

Is something I can’t skip.

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Many face sales issues,

Perhaps from not understanding

The changed consumer behaviors.

They need to do more homework,

And grade their stock better,

Matching each property to the right customer.

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Marketing strategies need more planning,

Choosing listings with true market potential,

And selecting the right platforms.

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These days, marketing can't just blast everywhere.

We need tighter, best-planned marketing.

Because a wrong decision

Means spending money

Without generating any leads.

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I recommend practicing value-focused selling,

Rather than price-cutting to close deals.

This helps us meet potential customers

Who generate long-term revenue.

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Some have insufficient income.

Some have no sales at all.

Leading many to quit this profession for others,

Or demote it to a side gig.

Which I feel sorry about.

Because it’s like jumping from the frying pan into the fire.

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Today, it feels like being a lawyer

Resolving disputes between owners and tenants,

And also being a counselor

For each agent’s problems.

#KeepFighting

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Next year could be a new or old story.

We have to wait and see.

Hopefully, there will be no virus mutations

Leading to another outbreak.

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I intended to type only a little.

But ended up writing so long in a blink.

Happy New Year 2022.

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Parinwatch Knapakvorn (Ex)

Managing Director

Matching Property Co., Ltd.

Real Estate Broker

Buying, Selling, Renting, Consulting in all property types.

Caring, looking after, taking care, like a fan.

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Join the conversation at

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