Enter project name, location or BTS&MRT station

Plus Property points to momentum in low-rise property market despite LTV measure implementation

02 May 2019 plus news and update

Plus Property points to momentum in low-rise property market despite LTV measure implementation; detached house and townhome sales expanded in H2 2018

Plus Property, the full-service professional property and facility management agency, takes note of good consumer response to the low-rise property market during the second half of 2018. Demand and supply grew, for both detached houses and townhome, and sales expanded from the prior year. Supply of detached houses increased by 13% from the same period of the previous year whereas demand increased by 46%; sales tally stood at 44% of supply. Meanwhile, supply of townhome increased by 21% and demand expanded by 26%; sales was 47% of supply. Detached houses and townhome in the suburban areas serviced by transportation linkages received warm response from buyers. As for the direction of the low-rise market in 2019, PLUS expects real demand for residency and momentum that resulted from developers’ campaigns to result in the market expanding at a similar level to 2018, despite the implementation of the LTV measure by the BOT.

Ms. Suwannee Mahanarongchai, Deputy Managing Director, Plus Property Company Limited, the full-service professional property and facility management agency, revealed that surveying by PLUS’s research and development division has found notable growth in the low-rise property market that includes detached house and townhome. Demand and supply were found to have grown toward the same direction; supply on offer has risen by 13% over the same period of the previous year to 17,400 units. Compared to the same period of the previous year, new supply grew by 41% or 7,300 units. Construction phase expansions at existing property projects made up part of the new supply, in addition to the contribution to supply from new projects that were put on offer as a result of developers wanting to encourage buyers to make their purchase decision before the Loan-to-Value (LTV) criterion comes into effect in April, 2019. Demand response has been had for some 7,700 units, translating into a 44% sales ratio. Total demand in the second half of 2018 had risen by 46% over the same period of the year prior and by 44% over the first half of 2018. The price level of 3-5 million baht remains this market’s primary selling group and is able to generate decent sales in the outskirts of Bangkok. Development sites of property projects at this price level have increasingly expanded toward the said areas. Meanwhile, improvement to transportation such as the construction of roads and several mass transit lines to serve these areas is allowing for easier commutes to the downtown area.

The townhome market has been found to be equally attractive. The townhome market continually expanded in the second half of 2018, and supply on offer had risen by 21% over the prior year to 36,200 units – the majority of these units were within the price level that did not exceed 5 million baht. Compared to the same period of the previous year, new supply within the townhome market grew by 24% or by 16,000 units in the second half of 2018. Demand response has been had for some 17,200 units, translating into a sales ratio of 47%. Total demand in the second half of 2018 rose by 26% over the same period of the prior year and by 66% over the first half of 2018. Nonetheless, townhome priced no higher than 5 million baht remained the primary product receiving good demand response within this market. The 3-5 million baht price level had experienced a growth of 39% over the previous year, and a sales ratio of about 50% had been had. The townhome market grew well in the suburban locales that offered easy commuting linkages to downtown. These properties offered the advantage of having more usable space than condominium rooms within the same locality, and can be had for comparable prices.

“The market for low-rise properties became reinvigorated towards the end of 2018 after having experienced a slowdown in the 2-3 years prior. There was an increase in launches of new projects, for the purpose of stimulating sale numbers before the LTV measure kicks off. However, we do not view the implementation of the LTV measure as having a significant effect on the low-rise market, because detached houses and townhome were items that garner real demand for residency. The 2019 market direction for low-rise residences is expected to be driven by consumer demand that was observed during the latter part of last year. Meanwhile, property developers are expected to continually release campaigns to offer incentives to purchase. The low-rise market is, therefore, expected to grow in a manner similar to 2018.”