Large developers will continue to dominate the market this year due to the competitive edge from lower borrowing costs and more funding sources.
Prasert Taedullayasatit, president of the Thai Condominium Association, said large developers controlled the market in the first half and would continue to do so in the second. Many played in every market segment, from those with unit prices lower than 50,000 baht per square metre to over 250,000 baht.
"Some of them will undergo business restructuring in the next six months as the sluggish economy affected the lower-end segment where high household debt was a major problem," he said.
Large developers had lower costs of funding with interest as low as 2.3% from various sources such as bank loans, warrants, bonds and debentures, enabling them to invest in plots in prime locations where prices are high.
According to the association, half of the new townhouse and condo launches in the first half were by large developers. They also launched nearly two-thirds in the single-house segment.
In the first half, there were a total of 144 new residential projects launched worth a combined 216 billion baht, which accounted for only 33% of the launches planned for this year.
Mr Prasert said the property tax incentives helped boost unit transfers in the first four months, but weakened new housing demand in the period. Overall presales in Greater Bangkok dropped 5% year-on-year in the first half.
Opas Sripayak, managing director of SET-listed L.P.N. Development, said negative factors in the second half that would affect the condo segment include high household debt, stricter mortgage rules and lower consumer confidence.
In the lower-end segment or units priced less than 1 million baht, LPN found half of buyers failed to get a mortgage loan approval from banks due to insufficient income, unclear sources of income or credit problems.
Infrastructure was key to driving the property market as it generated new demand in the housing segment, said Chanond Ruangkritya, chief executive of SET-listed Ananda Development Plc.
Peerapong Jaroon-ek, chief executive of SET-listed Origin Property, suggested developers should have a clear business model, find a niche market and fresh demand. They should also be a first mover to avoid high competition.
"Each location, station or even soi has a different demand. Developers should find it and offer the right product, price and segment to meet their requirements," he said. "Developers should also monitor the market and adjust sales and marketing strategies to keep up with the situation."
Good after-sales service was also another strategy condo developers should adopt or improve as it helps brand building and makes customers happy, Mr Peerapong added.
Apa Ataboonwongse, president of SET-listed Richy Place 2002, said the market in the second half would improve as the economy picks up after many negative factors passed. The only challenge would be the constitutional referendum.