Thailand’s Expat Housing Market Hits The Skids As Unsold Units Multiply

Thailand’s glitzy capital now has a glut of unsold condo units.

As the Thai economy begins to stutter and restrictions on mortgage lending kick in, property developers are being left with falling prices and just 55 per cent in take-up rates. Real estate agencies in the city as well as developers seem to have been caught unawares by a lack of buyers due to world instability and bad press as regards the Kingdom’s view of foreigners and expats in general. In addition, the Chinese investors who’ve contributed to the previous property sales boom are no longer arriving en masse due to recently introduced outflow-limiting capital controls and the slowing down of China’s economy.

Political instability may also be affecting the numbers of new expat professional arrivals looking for a short-term home from home. At present, prices are down by some six per cent overall and are expected to drop further. Last year, a total of around 65,000 new-build apartments came onto the market, the highest total since 2011. Prices are falling year-on-year, with a sharper drop expected due to lack of investor interest. Phrases such as ‘equilibrium stage’, ‘realistic price levels’ and ‘adjustment’ are being bandied about in local media, with pessimists simply believing the boom is now over. A cut in the Finance Ministry’s economic growth forecast isn’t helping improve investor sentiment, and the lack of clarity over the results of the general election plus rumours about currency manipulation aren’t helping.

In fact, the slump in demand isn’t just confined to Bangkok, as a total of almost half a million residential properties across Thailand failed to sell last year, wiping an estimated $41 billion off the sector’s overall receipts. Major cities such as Chiang Mai and the resort cities in the south of the country all have oversupplies of condo units previously being marketed to Chinese tourists as holiday homes, with recent negative developments as regards long-stay visas causing expats to sell their apartments and leave. In addition, the number of Western visitors who buy property ahead of a planned retirement is also in decline.