Thailand Real Estate Market Outlook 2019
12 Feb 2019
2019 will be a year with significant changes in Bangkok’s property market, with slow growth in many sectors and incoming waves of new supply.
The race for rare sites is still hot with increasing land prices and scarcity of freehold lands in prime locations. However, with new regulations on the horizon, developers are taking a step back to assess the situation.
Tighter mortgage regulation and recent increase in interest rates from the Bank of Thailand will pose challenges for condominium developers in 2019. With rising supply, uncertainty about domestic end-user driven demand and some fears about the sustainability of foreign demand, the outlook for the condominium market has become more unclear.
In 2018, overall Bangkok office demand remained strong and continued to come from both domestic and multinational firms mainly involved in services and manufacturing industries.
CBRE believes, as more companies adapt agile workplace solutions, occupiers will be putting more people in less space which could result in a lower total office net take-up.
E-commerce will continue to be one of the biggest trends for the retail industry in 2019. As e-commerce dominates the global retail landscape, bricks-and-mortar retailers are forced to expand their online presence, leverage exclusivity in-store, and offer products or services that cannot be replicated online.
As for the RBFs market in 2019, the total supply is expected to remain stable with a continued drop in vacancy rates as existing factories continue to be leased or sold to manufacturers. The demand for RBFs will also be driven by the impact of the trade war in 2019. More developers are heading towards the Built-to-Suit strategy which is designed for customer’s specific requirements with longer lease periods of 10 to 15 years.
Weaker domestic demand could result in developers being more selective in purchasing development sites for both residential and commercial developments. This could slow down the rise in land prices except for prime CBD locations due high demand amid its scarcity.
CBRE expects to see more land acquisition in the beginning of 2020 when the new Bangkok City Plan and the New Land and Property Tax are expected to come into effect.
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