The number of unsold property units in Bangkok is expected to rise by as much as 8 percent this year.
Kasikorn Research has predicted the actual number will reach up to a staggering 177,000 individual units by the end of the year.
The firm said that the residential property market was sluggish during the first half of 2017. and that the disappointing performance should continue for the rest of the year given that consumer purchasing power has not yet fully recovered and labor issues have continued to inhibit the launch of newly-built residential units.
However, it said that Thailand property developers must continue to invest in order to realise future income, though they may need to be more cautious during the rest of the year since the property market remains in the doldrums.
“KResearch is of the view that it should take quite some time for unsold residential units to be absorbed out of the market. Given this, we have assessed that the outstanding inventory of unsold residential units in Greater Bangkok at the 2017 yearend may reach 170,000-177,000 units, increasing by between 4 percent and 8 percent year-on-year.”
It added that regarding property markets upcountry, it expects that developers will unlikely be able to increase prices, nor quickly sell their outstanding inventory of unsold condominium units there if they are not located in economically prosperous or popular tourism locales.
Because the rising inventory of unsold residential units will be a major challenge for developers who have yet to find a marketing approach to sell them, KResearch said that it believes developers with many unsold residential units will likely focus on a broader base of potential buyers, including young workers, careerists, families, older persons and foreign nationals.
Residential projects currently under construction and those having many unsold units should be more flexible in meeting the needs of such diverse buyers.
It concluded its research report by saying developers may also face a number of other challenges ahead, too, such as labour issues, excess inventory in certain locations, hefty household debt, and possible interest rate rises, while still having to close sales as quickly as possible to maintain liquidity.