Keeping up with the shifting trends in 2013
The maxim that change is the only constant holds in the new year as home buyers will make decisions based on a shortage of domestic help, a retreat from private vehicles and greater emphasis on quality and health
With each year seeming to go by more quickly than the one before, changes are happening just as fast, making it difficult to keep up. As we welcome 2013, let's take a look at the developing trends that will affect the property market in Thailand in the next year.
HOUSES VERSUS CONDOMINIUMS
One of the key factors that will affect a buyer's decision on whether to purchase a house or a condominium is the shortage of domestic staff. Thailand is currently facing a major shortage of domestic help and this forces homeowners to consider living spaces that are easier to manage and maintain.
The labour shortage has emerged in large part because of reforms in Myanmar that have prompted many workers to return home. Contributing to the problem is the rise in the minimum wage and the Thai government's attempts to bring the illegal migrant situation under control through a verification system. It's a situation that will only worsen and will influence future buying trends for first-time homeowners, as well as those who are currently living in houses and might consider shifting to condominiums as a solution.
Condominiums have clear advantages over houses in terms of convenience, security and maintenance. A more compact space within the unit, a centralised security system and shared common areas and facilities often eliminate the need for full-time maids. We expect to see an increasing number of end-users who would be inclined to adopt the condominium lifestyle.
THE SKYTRAIN GENERATION
The trend of buyers to locate near rail mass transit lines will continue and grow in its importance. The BTS and MRT have long been a key deciding factor on development locations, as new residential and commercial developments launched in recent years have mirrored the planned extension routes. With worsening traffic conditions in Bangkok, access to the mass-transit systems will be even more critical for both residential and office developments.
The use of the skytrain and underground are now far more accepted and even those who have never routinely used public transit in their daily lives will increasingly do so. In the long term, Bangkok will become more like cities such as Hong Kong and London which have reached the point where it is no longer affordable for the working class to drive on a regular basis. The trend of using public transport will grow in importance and new projects near mass transit will continue to be in high demand despite the slowdown in the condominium sector.
MARKET EXPECTATIONS OF QUALITY
Recently a growing problem of unit defects has raised concerns about the quality of finished homes and condominiums. Buyers who have experience in dealing with defects will logically be more focused on quality for their next purchase.
The quality of housing design has improved significantly, particularly for luxury projects. We believe Bangkok is on par with mature property markets in terms of its product offerings and design. However, the key challenge the market faces today is in delivering quality finishes.
Due to the shortage of skilled labour, delivering the quality promised is a challenge. The problem lies not in the specifications and materials used, but in the quality of construction. With higher expectations of quality (which is often associated with higher prices) and the lack of skilled labour to deliver this, the market gap is widening. This will be one of the key challenges for developers to tackle. The ability to deliver quality construction and finishing will be the key to success and a competitive advantage for the coming year.
High quality property management is also in demand, but again the problem of sourcing skilled labour cuts across the board. Delivering high quality and efficient property management requires a pool of experienced and qualified staff. To improve the efficiency of the property management industry, property managers will need to focus on recruiting quality staff and may look to the introduction of technology to replace manpower to the extent that this is possible.
For example, introducing automated security systems to reduce the number of guards. Nevertheless, recruitment of key personnel such as building managers will be a challenge and it will be essential to provide incentives to skilled staff, including higher pay, to retain them.
The Bangkok retail industry continues to change rapidly and key players need to constantly adapt to keep with the trends. With new retailers and brands always entering, the market is a competitive one as consumers are constantly wanting a new experience.
Established retailers and brands need to adapt to offer new and wider product ranges to compete _ this is true for all sectors of the retail industry from food to fashion.
There are two key trends that we see as becoming more important. The first is a new focus on quality products in a mass market. In general, in the past the market has focused primarily on developing the supply without a lot of thought given to quality. However, to be successful in today's market the product, whether it is food and beverage or fashion, needs to offer quality along with affordability. This is the reason why "fast-fashion" brands such as H&M and Zara have been so successful.
The second key trend is a growing emphasis on facilities to improve or maintain health and beauty. This is driving demand for related products and services such as beauty and aesthetic clinics, fitness clubs and food and beauty supplements.
There is a clear lack of fitness facilities in Bangkok and many clubs tend to be overcrowded, resulting in poor services. At the same time, it is also not easy to find suitable space for fitness clubs due to their large space requirements.
As in the area of residential properties, retail developers also need to be innovative to remain at the forefront. New retail malls today attract crowds largely through their unique concepts; older malls must therefore must renovate to remain vibrant, fresh and appealing.
With today's lifestyles, consumers are seeking new retail experiences, both in terms of product and the retail concept.
These are just some of the changes we have highlighted which will have an impact on next year's property market _ changes that will have an impact across the board and define the trends and challenges for next year.
About the author
Writer: Aliwassa Pathnadabutr