Discovering why is there a shift to low-rise housing development.
While the long-term effects of Covid-19 are yet to be seen, the global pandemic has certainly impacted the current real estate sector in Thailand. Without the support of foreign investors, developers are setting their sights on the local market for a revival. Apart from offering various incentives to buyers and renters to move current surplus stock, developers are also shifting their focus from condos to low-rise housing projects.
With household debt on the rise and consumer purchasing power in a decline, Bangkok has been left with the highest surplus of unsold properties in the last 24 years. And while high-rise condos have long been the focus of developers due to foreign investment demand and the rising costs of land, major players in the real estate sector are shifting their focus from these projects to low-rise housing – a reflection of the real demand from the local market.
According to the Real Estate Information Center (REIC), the price index of low-rise houses in Greater Bangkok increased in the first quarter of 2021 due to rising demand after decreasing for three consecutive quarters.
So, what has caused this shift for local buyers? The obvious reason is Covid-19. Once a mecca for urbanites, Bangkokians are now looking to move away from the crowded risk-prone city center in pursuit of more space and value for money.
Higher-income individuals who may have experienced less financial impact as a result of Covid-19 are also interested in investing in domestic vacation homes and rental properties, in order to escape the metropolitan area while still maintaining social distancing and safety measures amidst the pandemic. This trend has also seen an increase low-rise projects in other provinces.
On the other hand, lower income individuals are experiencing mounting household debt which has resulted in lower purchasing power. This has led to the majority of surplus properties to be in the 3 million Baht or below price range – and why we are seeing a shift in more high-end and luxury low-rise projects.
Another reason for this low-rise housing trend? A shift in Thai culture from the more traditional family structure to a rise in single society, families with no kids and an ageing society. As a result, housing that once served the family sector may no longer meet the needs of Thailand’s changing society. Developers are responding with new low-rise housing developments that are modern and appealing to a wide range of potential buyers.
As the profile for homeowners in Bangkok becomes more diverse, developers are tasked with crafting projects that move away from the traditional 3-bedroom, 3-bathroom family home to homes with versatile work spaces, greenery and functionality. Let’s take a look at the needs of these new homebuyer personas:
Owning a home is a goal that many aim to achieve in their lifetime, however single homeowners or couples with no children are looking for different features and amenities than traditional family homeowners.
As more and more people are finding themselves working from home, the need for more space and privacy is growing. Buyers are trading in chic urban condos for more outdoor space and privacy – especially with recent Covid-19 restrictions.
With no children, these buyers are also less interested in bedrooms and more interested in a home office, hobby rooms, entertaining areas and flexible living space that can be easily converted into whatever their next interest or life adventure requires.
Thailand is moving toward an ageing society, which means the number of elderly or senior home buyers is also growing. This group includes retired couples, seniors with no family or children and seniors with caregivers who are looking for independent living facilities in supportive communities.
Senior-focused projects developed often consider the health and mobility needs of this demographic and include such features as single-storey homes with no stairs, a spare bedroom for a caregiver and a flexible living space that can be easily converted to suit the growing care needs of each resident.
The other mainstream home buyers in the near future will be seniors — including retired couples, seniors without spouses or children, and those with caregivers — who are not only looking for senior living accommodation but also housing projects with a good environment and community.
Are you looking to move or invest in low-rise housing in Bangkok? Speak with one of our experienced agents for the latest in property trends and insight into new projects like Venue Rama 9, Grand Bangkok Boulevard Bangna – Onnut or The Gentry Phatthanakan.
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