Property developers should focus on Thai market

property developers
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Property developers should focus on demand from Thai clients rather than foreign buyers who may only stimulate Thailand’s property market in the short term.

Those are the words coming from real estate firm Nexus Property, who also advised developers to: “… do research to see the real demand of consumers before developing projects.”

Nalinrat Chareonsuphong, the Managing Director of Nexus Property, said the Q2 saw an additional 9,395 units coming onto the Bangkok property market, with Charansanitwong and Saphan Khwai attracting attention.

She added that during the first half of 2018, average prices increased by 5 percent to THB 137,100 per sqm, with the centre of Bangkok seeing a 6 percent rise to THB 223,000 per sqm.

Justifying her company’s decision to advise Thai property developers to focus more towards the Thai market, she noted the slowing of rental price rises.

She said that foreigners bought for either short- or long-term investments, and expected annual returns from rental income alongside capital gains.

Due to the slowing of rental rates, and returns, she suggested that in the long-term foreign buyers may only search for capital gains due to lower rental income.

The foreign quota of 49 percent may only be filled at certain projects hence, property developers should remain focused on the Thai market, she added.

Nalinrat concluded, saying that: “… sustainable growth in the condominium market in Bangkok needs to mainly depend on Thai buyers, and be supported by foreigners whose aim is to make a long-term investment from the rising condo prices.”

“Rental income should be a secondary objective that makes an investment more attractive,” she added.

This latest opinion will be a surprise to many property developers who have embarked on extensive marketing to attract overseas buyers.

It’s fair to say that, right now, without input from overseas buyers Thailand’s property market would be struggling at best.

Andrew Batt
The author of this article is Andrew Batt, the founder and editor of www.thailandproperty.news. Andrew has been writing about property and real estate issues in Thailand and Southeast Asia for more than 10 years. He has worked for PropertyGuru Group, DDproperty, Dot Property Group, Hipflat and AsiaRents. He has also produced content for leading Thailand property developers and real estate agencies.
Email: andrew.thailandpropertynews@gmail.com.

2 Comments

  1. Thanks Duncan,

    I think it’s also a case of overseas buyers looking at Thailand, regardless of the marketing. The interesting thing is that most overseas buyers right now (and yes, I’m referring to the Chinese) are ONLY looking for rental returns. Capital gains is not one of the main reasons they’re buying here. If those rental returns disappear then …

    Andrew.

  2. Interesting piece. That developers are looking overseas is a direct result of necessity in my opinion. It’s not a question of saying “they should focus on the Thai market” and that “Rental income should be a secondary objective that makes an investment more attractive”. Reality is reality: developers are selling a product and they are always looking to open up new markets, wherever those markets might be and whatever the “needs” of the buyers.

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