Is There A Housing Glut In Bangkok?
Bangkok is a bustling city where most Thais and expats work and live. The city is almost always full of life that is why there is high demand for Single House new project among property investors. Traffic is always present in a progressive city so that most workers opt for homes that are near the city’s public transport.
According to SoponPornchokchai, president of the Agency for Real Estate Affairs (AREA), there is no shortage of housing in Thailand. In fact, AREA estimates that 397 new housing and condominium projects were launched last year in Bangkok. The new housing projects will put 117,112 new units in the market, up by 8% year-on-year.
However, if the housing continues to go up this year, a bubble burst may be witnessed by 2019 or 2020. Property consultant, Colliers International Thailand, has estimated that at least 36,000 condominium units have not yet been sold in Bangkok at year-end. This is at least 23% of the new supply.
The glut is very noticeable in low-priced, single unit condominiums that were built near Bangkok’s mass transit lines. Mostly Thai investors who want their own home and speculators who want to join the rental market are attracted to the new projects.
The Bank of Thailand is pressuring banks to reduce exposure to the mortgage market so that Thailand will not re-experience a financial crisis similar to what happened in 1997-98. The financial crisis was triggered by the overexposure of banks to the property sector by using foreign bank loans.
Developers have become wiser in terms of investment. If there is oversupply, the developers themselves will slow down and invest in other sectors like luxury properties. 20% of supply that extends to the Eastern Seaboard that remains unsold is normal and can still be absorbed.
There are several factors that have to be taken into account when choosing a Single House new project like where you work, what school the children will go to and whether transport systems are within walking distance. If getting stuck in traffic is one of your worries, make sure the house is near the Skytrain, MTR underground or ferry boat services.