Potential Home Buyers Feel Property Prices Too High

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Potential Home Buyers Feel Property Prices Too High

And Suggest Government Needs To Issue Controls On Real Estate Prices

Millennials Expected To Become An Important Buyer Demographic In The Near Future

 

DDproperty, Thailand’s number one property portal, has revealed the findings of its Consumer Sentiment Survey for the first half of 2018, and found that most think property prices are too expensive and combined with the current economic downturn, consumers’ satisfaction with the real estate climate has declined. The survey, which polled over 1,000 people, also found that consumers want the government to issue new measures to support people in purchasing property and that the real estate market should keep an eye on the increasingly important Millennial demographic.

 

The DDproperty Consumer Sentiment Survey H1 2018 found that 70% of the survey’s participants thought that current properties are expensive or overpriced, while 61% also thought that the economy is not performing well, leading to dissatisfaction with the Thai real estate climate.

 

Due to such factors, real estate consumer satisfaction during the first half of 2018 dropped to 57%, which is down from 61% on H2 2017 and also down from a high of 68% three years ago. With less purchasing power, 61% of those surveyed agreed that the government has not been doing enough to make housing affordable.

 

 

Respondents suggested that the government should provide more support for home buyers by, first, regulating prices of newly launched properties by developers (69%); second, providing more subsidies to first time home buyers (62%); and third, regulating supply of all property types (45%). However, 83% of consumers in the survey expect real estate prices to increase within 1 to 5 years. As for buying intentions, 41% are planning to buy a home within six months, up from 36% in the H2 2017 survey.

 

Mrs. Kamolpat Swaengkit, Country Manager for DDproperty commented that “DDproperty’s Consumer Sentiment Survey has focussed on consumer's demand for housing, and it's clear that it still exists. However, pricing appears to be the main barrier to buying, especially for first time buyers who are often new jobbers wanting to create a family but have low purchasing power. These first-time buyers, however, will need to make purchase decisions soon as property prices continue to trend upwards which will make entry into the market even more difficult.”

 

Moreover, 36% of respondents indicated that Outer Bangkok is their preferred location to purchase. Twenty-six percent intend to buy in the new Central Business District (CBD), which includes Ratchada, Ladprao, and Rama 9 areas, while 15% are interested in the Mid-Inner Sukhumvit area (Phrakanong, Onnut, and Udomsuk). With regards to property type, 58% said they are likely to purchase a single-detached house while 55% said they were likely to buy a condominium.

 

95% of respondents are looking to buy properties priced no higher than THB5 million, whereas 48% prefer a price of less than THB1 million, and 35% are looking at the THB2-3 million price range. The key factors that influence buyers’ decisions, aside from price, are firstly, the location (95%); secondly, infrastructure and available amenities (69%); and, thirdly the safety and security of the local area (64%). 

 

 

Millennials To Become A Significant Real Estate Demographic

 

The survey also looked into the real estate potential of Millennials (18 – 34 years old) as a group. This group is expected to influence socio-economic change in the next 10 years and the survey found that 50% of Millennials are currently living with their parents. Of this group, the top five reasons for not moving out are: want to stay to take care of their parents , do not have enough savings to buy their own home , were not yet married , the family home is still big enough to stay in together , and they preferred to save their own money rather than buy a property.

 

 

However, 45% of Millennials still living with their parents plan to move out by the age of 35, and around 65% already have a monthly savings strategy to help them buy their own property in the future.

 

“DDproperty’s Consumer Sentiment Survey indicates that Millennials are expected to become a large group of real estate buyers in the near future as many are currently living with their parents. At the same time, a large number are already planning to move out and have a savings plan and are looking forward to a home of their own in the future. Our research shows their budget will be THB1-4 million, so maybe real estate developers should consider catering more for this demographic and price bracket in the future” added Mrs.Kamolpat.

 

 

[ozziedave007]

So in what country in the world do first home buyers think that properties are cheap?. Interestingly whilst sighting a drop in consumer confidence, also note an increase in intentions to buy in conjunction with an expectation of a rise in values over next 1-5 years.

A first home owners subsidy means tested on purchases up to 3 Million and a stamp duty exemption maybe?

[Delight]

 When I purchased my condo -early 2006 -it cost me £51500

If I was buying today (assuming the same Baht price ) I would need to find £81500.

Impossible to justify that kind of money

Taking steps to reduce the price of Baht would be useful.

[worgeordie]

People doing buy to rent will also be having problems,as

the cost of a property ,the rents are not obtainable to give

any sort of decent return,so not really worth the hassle.

 

regards worgeordie

[NCC1701A]

"61% of those surveyed agreed that the government has not been doing enough to make housing affordable."

[Cake Monster]

" Potential Home buyers say property prices are too high "

Now go ask the question of potential buyers  " Are vehicle prices too high "

Thais have a much bigger need for a new car than they ever will have for a Property. 

The reason is that more people will see the new car than the house = more face.

[mlmcleod]

The purchase of "any" property by foreigners is a poor choice.  You are never sure that you will be allowed to stay and enjoy it!  Besides rentals are cheaper here.

Edited July 26, 2018 by metisdead
Bold font removed again. Please stop using bold font when posting.

[Expatthailover]

Need to put much more stringent controls on foreigners buying property, including vetting the thai partners of  purchasers.

Perhaps a tax of say 25% on purchase price if the purchaser is foreign or purchaser is spouse of a recently arrived foreigner.

Not fair to thai society what is happening at present.

They graciously allow us into the country and we cause so much disruption. That so many whinge from day 1 and you can see why thais are a bit bewildered by the latitude foreigners are given.

Edited July 26, 2018 by Expatthailover

[Delight]

52 minutes ago, Expatthailover said:

Need to put much more stringent controls on foreigners buying property, including vetting the thai partners of  purchasers.

Perhaps a tax of say 25% on purchase price if the purchaser is foreign or purchaser is spouse of a recently arrived foreigner.

Not fair to thai society what is happening at present.

They graciously allow us into the country and we cause so much disruption. That so many whinge from day 1 and you can see why thais are a bit bewildered by the latitude foreigners are given.

 Fail to see how foreigners are given latitude.

More the other way around i.e a Thai  can buy a house and the land associated with  it in many parts of the  world-certainly in UK

Suspect that  they are bewildered by the lattitude afforded them by the UK government.

 

 

[Number 6]

Simply allowing the market to function in a normal manner would be a great step in tbe right direction - full transparency.

 

Real estate needs a huge reality check in this country.

 

Land is held in too few hands and while I'm not advocating taking it from them, they should be taxed to damnation because these few families completely dominate land values.

 

The rentier class as well, all that black and gray money sloshing around - buy it, rent it or not, don't care. Empty condos! People simply have forgotten what they own. What sloth.

 

Condos are 'managed' not only inappropriately, but illegally. Then there's all the people that completely disregard the rules from pets to Airbnb to not whatever.

 

Developers should be taxed to hell for renting condos. It shouldn't even be legal. Only in this fairy tale city that developers would even be able to sell 30% and call it a success, get another loan rinse and repeat. The quality is pretty crap as well.

 

All condos should be a minimum of 45sqm, livable for two with proper balcony and windows. I just laugh...23sqm in not a hugely spectacular area for 110k sqm. Did you catch the 23sFm?! You'd think it's Hong Kong. You'd have to by three and your not anywhere close to 80sqm.

 

I'm still waiting and if my patience runs out, at least I can buy on the intercoastal in FL. Thais are stuck.

 

I'd love to to able to buy 2-3 rai private residence. Never going to happen.

The market is 25-60% overvalued.

 

All the bs regulations about foreign not foreign condo ownership. Wife can't inherit and hold foreign ownership. Heirs can't inherit a condo, it must be sold... Bah. Have to do far better to get my lifetime commitment to property.

 

What about residency based on a X million THB condo purchase. Anyone remember that scam?

Edited July 28, 2018 by Number 6

[Renter]

"simply allow the market to function in a normal manner"  I'm laughing so hard my stomach hurts.  You must be forgetting where you are !

[Damrongsak]

" The survey also looked into the real estate potential of Millennials (18 – 34 years old) as a group. ...  Of this group, the top five reasons for not moving out are: want to stay to take care of their parents , do not have enough savings to buy their own home , were not yet married , the family home is still big enough to stay in together , and they preferred to save their own money rather than buy a property."

 

Other reasons given:

 

They have internet.

The food is better.

I can live here for free.

I would have to work.
My shoes are too tight.

I have to go to the bathroom a lot.

 

 

 

"

[kuma]

Indeed.

Now looking to buy property as well, will do in gf name - no intention on my part to ever actually own it, just have reasonable right to use it with a Usufruct, Superficies or Right of Habitation - as a backup.

 

Doing so in part as I have no right at all to actually be the buyer, yet as described above, any Thai can fly to my home country and buy to thier hearts delight any and all property they see (with very few restrictions, mostly same restriction apply to citizens).

 

But I must say I do understand they do not want to create the kinds of fractured landscapes that many countries in the OECD are experiencing, and it is a highly desirable place to live so the most prized land would likely quickly get out of the purchasing range of most indigenous people very fast (aside from those who benefit from the sales)

 

The article here really talks just about Bkk only, not Thailand as a whole.

[kuma]

On 7/26/2018 at 10:13 AM, Delight said:

 When I purchased my condo -early 2006 -it cost me £51500

If I was buying today (assuming the same Baht price ) I would need to find £81500.

Impossible to justify that kind of money

Taking steps to reduce the price of Baht would be useful.

I would suspect their main area of concern is citizens, who work in Thailand and are paid in THB. The forex value is not a concern for them, it is the cost of the product domestically that matters. 

The strength of the THB has +'ves and -'ves, for the domestic population, it is not all bad news. 

[Senechal]

Just raise interest rates and reduce the amount of available credit.  Prices will plunge.

 

: D

Edited September 22, 2018 by Senechal

[CGW]

On 7/26/2018 at 4:56 PM, mlmcleod said:

The purchase of "any" property by foreigners is a poor choice.  You are never sure that you will be allowed to stay and enjoy it!  Besides rentals are cheaper here.

I have bought 4 properties here every one was a great choice ? 

Rentals are cheap for cheap properties! usually in not desirable locations ?

How can you call it "home" when you live in a rental?

[ivor bigun]

I have bought 4 properties here every one was a great choice ? 
Rentals are cheap for cheap properties! usually in not desirable locations ?
How can you call it "home" when you live in a rental?

You live,you die,you cant take your home with you,silly thing to say
Ps we own a house and land.

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[turgid]

Ive been looking. We visited a condo complex in Chon Buri to view a unit but as always with condo viewing the guard, cleaner, mate of the agents cousin  knew of another in the building and we ended up looking at 8 in the same building with 4 more we could have looked at if we were willing to come back.  So no lack of supply.  All but one was furnished.  only one of them was lived in. 

Based on the car park and people walking around i doubt the building is more than 50% occupied with people  living there - probably a lot less. You could shoot a post apocalypse  movie there.  I thought it might be a Bangkok weekend retreat so  went back at the weekend and there were no more cars in the car park, no  kids in the 3 pools and only a couple of people outside.  Yet there appeared to be no desire to sell either. Its all  priced per square metre regardless of floor, outlook, or condition or furnishing.   All the units were  low or middle floors (nothing above 13 in a 18 floor building) . Some had great sea views some were blocked.   They all had the same price for the same condo design.  Condition or furnishing didnt seem to make an difference. I made an offer which was rejected with no counter proposal.   People can obviously do whatever they want but the ususal laws of supply and demand as i understand them have never seemed to function in the Thai condo market.  The penthouse and corner units are never for sale and everything else is empty.   I asked the agent and he shrugged and said they just hold and hope until the price comes back. Or the bank seizes it.  

Maybe its the face thing.   Rent on. 

[ivor bigun]

I have bought 4 properties here every one was a great choice ? 
Rentals are cheap for cheap properties! usually in not desirable locations ?
How can you call it "home" when you live in a rental?

Wherever you lay your hat,thats your home.

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