CBRE has forecast a series of potential changes for Thailand's property market in 2019 within its real estate outlook.

While the race for quality sites is still hot with the increase in land price and scarcity of freehold land in prime locations, the company believes new regulations could prompt developers to hold back and assess the situation.

New Regulation and Uncertainties

According to CBRE's Real Estate Market Outlook 2019 Thailand’s real estate market will be facing series of changes including an increased policy rate, tighter mortgage regulations and an upcoming general election in 2019.

"The upcoming election on 24 March 2019 will also have an effect on the economy and the progress of infrastructure projects across Thailand," it said.

Source: CBRE

High Competition in the Upper End of Condominium Market

CBRE is seeing many developers launching condominium projects with asking prices of over THB 300,000 per square metre and the new norm seems to be THB 250,000 per square metre. However, there will be winners and losers in the market. With a lot of options in this segment for buyers to choose from, CBRE is seeing slow sales in many projects. Unsold units in completed projects are being offered at discounted prices to clear the inventory.

The new projects are not competing on price alone, developers have also been implementing other unique selling points in their projects to attract buyers. Home automation, rental management schemes, and mixed-use developments are some of the selling points in the market today. In this highly competitive market, CBRE believes that the winners will not be projects with the best room layouts or design, but those that can sell the right lifestyle at the right price.

Source: CBRE

Retail Reinvention

CBRE expects the retail market to be positive following the economic recovery. Occupancy rate will remain high, but there is a significant amount of future supply. Weaker centres will struggle to retain and attract tenants with the dual threat of e-commerce and future competing supply but rent will remain unchanged.

EEC: Industrial Incentives

The Eastern Economic Corridor (EEC) will have a much clearer picture this year when the bid for Transit Oriented Development (TOD) projects along the high-speed train routes to EEC is finalised. CBRE believes that this will jump start Thailand’s attractiveness to foreign manufacturers and investors in the EEC. The government is also offering financial incentives and tax exemptions within the Free Zone in industrial estates to foreign manufacturers.

It is too early to tell whether Thailand is benefitting from the Trade War between USA and China. However, CBRE has seen some interest from Chinese manufacturers who are looking to relocate their production base to Thailand in the EEC area.

Source: CBRE

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