Prospective homebuyers in Thailand think property prices are too expensive and, given sluggish economic growth, their satisfaction with the real estate climate has declined, according to a survey by DDproperty, the country's top property portal.
The consumer sentiment survey for the first half of 2018, which polled more than 1,000 people, also found that consumers want the government to introduce new measures to support people purchasing property. As well, the real estate market needs to keep an eye on the increasingly important millennial demographic.
Seventy percent of survey participants thought that current properties are expensive or overpriced, while 61% also thought the economy was not performing well, leading to dissatisfaction with the real estate climate.
Given those factors, real estate consumer satisfaction during the first half of 2018 dropped to 57%, which is down from 61% in the second half of 2017 and also down from a high of 68% three years ago. As they perceive their purchasing power to be reduced, 61% of those surveyed agreed that the government has not been doing enough to make housing affordable.
Respondents suggested the government should provide more support for homebuyers by regulating prices of newly launched properties (69%), providing more subsidies to first-time homebuyers (62%), and regulating supply of all property types (45%).
However, 83% of consumers in the survey still expect real estate prices to increase over the next one to five years. As for buying intentions, 41% are planning to buy a home within six months, up from 36% in the second half of 2017.
"DDproperty's Consumer Sentiment Survey has focused on consumers' demand for housing, and it's clear that it still exists," said Kamolpat Swaengkit, country manager for DDproperty. "However, pricing appears to be the main barrier to buying, especially for first-time buyers who are often first-jobbers who want to start 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 a home. Twenty-six percent intend to buy in the new Central Business District (CBD), which includes the Ratchadaphisek, Lat Phrao and Rama IX areas, while 15% are interested in the Mid-Inner Sukhumvit area (Phra Khanong, On Nut and Udom Suk).
With regard to property type, 58% said they were likely to purchase a single detached house while 55% said they were likely to buy a condominium.
Ninety-five percent of respondents are looking to buy properties priced no higher than 5 million baht, with 48% preferring a price below 1 million, and 35% looking at homes in the range of 2-3 million baht.
The key factors that influence buyers' decisions, aside from price, are location (95%), infrastructure and available amenities (69%), and the safety and security of the local area (64%).
The poll also looked into the real estate potential of millennials (18-34 years old) as a group, given their growing influence on socioeconomic change. It found that 50% of millennials are living with their parents.
Of this group, the top reasons for not moving out are they want to stay to take care of their parents, they do not have enough savings to buy a home, they are not yet married, the family home is big enough, and they prefer to save their money.
However, 45% of millennials still living with their parents plan to move out by age 35, and around 65% already have a monthly savings strategy to help them buy their own property in the future.
"Our research shows their budget will be 1-4 million baht, so maybe real estate developers should consider catering more for this demographic and price bracket in the future," Ms Kamolpat said.