TRIS Rating has maintained a “stable” outlook for Thailand’s residential property sector.
Despite several lingering unfavourable factors, the company believes that most rated property developers will be able to adjust their strategies to cope with the current tepid economic conditions in the domestic market. Demand in 2017 is expected to be flat or grow slightly from last year’s level, as the country’s banks are still maintaining stringent conditions on loans to home-buyers amid concerns over the high level of household debt nationwide and a recent rise in non-performing loans. However, TRIS forecasts that the ratio of household debt to gross domestic product will not increase further. In addition, interest rates will not rise as fast as the ratings company had projected previously. The major concern for this year will be the ongoing rise in the number of unsold housing units available for sale, especially in the low-priced condominium segment, it said. At the end of last year, according to the Agency for Real Estate Affairs, there were 184,329 housing units available for sale in Bangkok and its suburbs. The proportions were roughly equal: about 30 per cent of the total were single-detached-house and detached-house units, 30 per cent were townhouses units, and 38 per cent were condominium units. Condo units available for sale totalled around 70,000, the highest number since the 1997 financial crisis.