Predictions that there will be fewer new property launches in 2019 can only be a good thing for the Bangkok property market that is currently seeing oversupply in some locations and at some price levels.
Thailand’s Real Estate Information Center (REIC) has suggested that is expects to see fewer new Bangkok property launches next year if new plans from the Bank of Thailand are implemented as suggested.
Vichai Viratkapan, REIC’s acting Director-General, was reported as saying new supply in Greater Bangkok during 2019 will drop to 92,000 units – from an expected 116,000 new units this year.
This latest prediction, which comes after the central bank’s announcement earlier this month,
“The requirements will affect new supply as developers will be hesitant to launch projects,” he said.
“Developers estimate a slowdown in home purchasing power if the new requirements are applied.”
A property developer survey conducted by REIC in late September showed confidence was lower on every issue.
The biggest decline in confidence, according to the survey, was development costs. Developers are concerned about prices rises in fuel, construction materials and land, as well as possible interest rate rises.
Industry bodies have expressed concerns that the Bank of Thailand’s suggestions to reign in mortgage lending may cause problems for the real estate sector. Some suggest they are going too far, too quickly.
The motives behind any moves by the Bank of Thailand are aimed at speculators and, to a lesser extent, investors. It wants to ensure demand if real in the Bangkok property market.
Observations and comments from our industry sources suggest many Thai buyers are already playing a wait-and-see game.
That could well mean that the foreign buying sector, which is not impacted by Bank of Thailand regulations because mortgage finance is next-to-impossible for overseas buyers inside Thailand, will become an even more important Bangkok property buying demographic.