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Plus Survey on Detached Houses Finds Supply Growing in Line with Real Demand

31 Mar 2020 plus news and update

Demand for Salaya and Bang Yai Localities Grew 60%; 10-20 Million Baht Price Range Outperforming

Plus Property sees developers remaining committed to penetrating real demand in 2020, with the market for detached houses continuing to grow. Surveys of the property market in the latter half of 2019 found that real demand for products in the detached houses category continued to provide growth momentum for the category, resulting in the growth of both demand and supply.

Bangkok’s west zone that includes Salaya and Bang Yai had a sales ratio of 60%, which exceeded the average overall demand at 56%. Meanwhile, supply for this zone also experienced a noteworthy expansion, especially for the 10-20 million baht price range.

Ms. Suwannee Mahanarongchai, Deputy Managing Director, Business Strategies and Asset Management, Plus Property Company Limited, the full-service professional property and facility management agency, disclosed findings by PLUS’s research and development division based on surveys of the overall property market in the second half of 2019 and in early 2020.

PLUS discovered that the situation for the sales-oriented market improved in the latter half of 2019, compared to the first half.The market for detached houses stood out among the products in this market because the supply that remained available continued to dwindle. Demand was rising faster than the rate of entry of new supply, reflecting a healthy level of demand for single detached houses.

Further scrutiny based on price ranges revealed that supply of products within the 10-20 million baht price range increased by 24% from the same period of the previous year. Within this respective round of survey, the western zone – Bang Bua Thing – Bang Yai - Salaya garnered the highest sales ratio, at 45%. Demand, meanwhile, rose by 23%.

Future-wise, the single detached house market is expected to grow as developers shift their emphasis towards real demand and increasingly develop property projects that respond to the demands of consumers. This emphasis is expected to center on the medium-upper price tier, where the buyers are seldom afflicted by economic volatility or state sector policy.

Developers, therefore, have increasingly been refocusing on residential properties within the said price range.

With respect to the overall picture of the market for detached houses, PLUS’s surveys of the latter half of 2019 found there were 21,000 units on offer in the entire market and the sales ratio stood at 56%. Demand declined by 6% from the previous year to 11,800 units.

Contradicting the overall picture, Bangkok’s western zone (Salaya-Bang Yai) and the southern zone (Phetkasem- Rama II - Bang Khun Thian) experienced an increase in demand from the prior year. The sales ratio stood at 60% – higher than average overall demand. The price ranges that saw demand expand were the 5-7 million baht price range and the 10-20 million baht price range.

Narasiri Rama 2

“The growth momentum of the single detached houses market is still apparent in 2020, as developers are still focusing on real residents. Hence, major property developers’ emphasis remains on increasing involvement in housing projects. Supporting factors such as state sector policies and interest rate schemes include the relaxation of the LTV measure, the reduction of the mortgage registration fee and the title transfer fee for residential properties valued at less than 3 million baht.

The reduction of the policy interest rate to 0.75% – the lowest on record – means that there is a tendency for mortgage rates offered by commercial banks to become lower as well. Importantly, the current availability of quality, ready-to-move-in products with approachable prices presents would-be homebuyers with a splendid opportunity.

Nonetheless, there is a negative factor that is severely affecting the economy as a whole, in the form of the COVID-19 outbreak. The situation has to be closely followed and preparations have to be made to adjust and cope”, said Suwannee.