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.