The third wave of the pandemic has only worsened housing demand in Bangkok's low-priced segment despite the extension of property tax incentives, a recent survey found.
Kamolpat Swaengkit, country manager of property website DDproperty.com, said the economy remains depressed from the latest outbreak, even with several government relief packages.
"The measures are insufficient to drive growth during a temporary shutdown," she said. "The property market will continue to lag in line with lower purchasing power. Although real demand remains, financial capability is lacking."
According to the website's recent property market index, the largest increase in housing supply in Bangkok came from units priced between 1-3 million baht.
This pricing bracket saw supply rise by 14% in the first quarter of 2021 compared with the fourth quarter last year, followed by a rise of 10% for units priced between 3-5 million baht, and 8% for those priced between 5-10 million.
"Although property tax incentives for new housing units priced at 3 million baht or lower were extended from the end of last year to the end of this year, the purchasing power of middle class to low-end consumers remains insufficient," said Ms Kamolpat.
She said these groups are saving for necessities instead of buying a house, which is in line with a survey by Suan Dusit Poll on Thai families in the Covid-19 era.
According to the poll, 75.4% of consumers regarded debt as the biggest problem, while 44% saw income and expense as a big concern.
Ms Kamolpat said high-end consumers who want to invest or purchase property have delayed their decisions because they are not confident about the current situation and property incentives do not apply for units they are considering.
DDproperty.com reported the number of people interested in units priced between 1-3 million baht had the lowest increase since it began tallying, only 14% quarter-on-quarter in the first quarter of 2021.
Those wanting to buy units priced 3-5 million baht saw a quarterly increase of 23%, while units between 5-10 million spiked by 27%.
Those wanting units costing 10 million baht and above reported a quarterly surge of 34%, said the website.
The report noted a drop of 4% in Bangkok's housing price index to 190 in the first quarter this year, from 197 in the fourth quarter last year.
This latest index was also the lowest in 15 quarters since the second quarter of 2017.
"In evaluating the current situation and other factors, we believe the property price index will likely not recover this year," said Ms Kamolpat.
Based on the categories, the price index of single-detached homes remains unchanged at 133, townhouses dropped marginally to 114 from 115, and condos declined to 102 from 105.
Meanwhile, the supply index in the first quarter of 2021 increased by 10% to 399 from 363, which underlines the high inventory amid a drop in purchases.