Bangkok’s low-rise housing market is showing signs of stabilisation after a sluggish first half, prompting developers to resume new project launches in the fourth quarter despite intense competition for limited demand.
Pakpring Karoon, deputy vice-president of SET-listed Sansiri, said the market had reached a stable level rather than continuing to deteriorate, encouraging developers to gradually introduce new projects.
“If we say the market is sluggish, it is sluggish but stable,” she said. “Developers have started launching projects in the fourth quarter after seeing signs that the market will not worsen.”
Developers face intense competition not only on prices but also with promotions, financial packages and lower booking payments as weak purchasing power continues to constrain homebuying decisions, said Ms Pakpring.
“We need to work with partners, including financial institutions, to offer attractive mortgage interest rates and help customers make purchasing decisions,” she said.
“Demand has not disappeared. Customers still want homes, but developers have to put in more effort to help them.”
Sansiri has been willing to wait for customers to improve their financial position before applying for mortgages, she said, citing cases where customers took several months to clear credit card debt before returning to purchase homes, said Ms Pakpring.
“Some customers disappeared for eight months to clear their credit card balances before they could qualify for a mortgage. We waited for them,” she noted.
NEW SUPPLY
The company is also seeking underserved segments, including along Srinakarin-Rom Klao Road from Krungthep Kreetha Road to Highway 9 (Kanchanaphisek Road), offering limited new detached houses priced at less than 30 million baht.
After acquiring 142 rai in the area, Sansiri plans to launch the Burasiri Well Krungthep Kreetha project on Saturday, with the first phase comprising detached houses starting at 23 million baht per unit.
Later phases will include three-storey twin houses priced from 12-13 million baht, targeting younger buyers who previously lived in condos and now want larger usable living space.
Sansiri is prepared to accept a 30% lower gross margin than its previous high-end detached-house projects in the area to reach a price point that better matches current demand, said Ms Pakpring.
Arnut Kittikulmetee, senior executive vice-president of Sansiri’s low-rise project development, said the low-rise market remains weak in line with economic conditions.
“The market peaked in 2022-23 when Covid-19 prompted many consumers to shift from condos to landed homes, driving a sharp increase in sales,” he said.
Mr Arnut expects investment and the economy to improve next year, particularly with greater government involvement, but does not expect the market to return to its previous peak within two years.
“Next year, we expect the market to improve slightly as investment starts to pick up. However, it will not return to the level seen three or four years ago,” he said.
Mr Arnut said developers were also keeping new low-rise home prices close to levels seen three years ago despite higher land and construction costs.
Sansiri has maintained margins through economies of scale from factory-produced structures and features, as well as land acquired at favourable costs, he said.
He expects the existing low-rise supply to take about three years to be absorbed as demand gradually strengthens.
“People still need to buy homes,” said Mr Arnut.
“Once the market falls to a certain level, it should not get much worse and will gradually recover.”