The ongoing pandemic will continue to hamstring the property market this year, keeping it reliant on local demand as foreign travel remains sluggish, according to property consultant CBRE Thailand.
Managing director Roongrat Veeraparkkaroon said the recovery of the Thai economy last year was gradual, despite global economic growth, because the country's GDP is heavily reliant on tourist arrivals.
"A decline in tourist numbers affected both residential and retail sectors," she said.
"Given this challenge, the property market should adapt, be more proactive and brace for uncertainties that could emerge."
Ms Roongrat said buyers have become more selective and sophisticated while investors and developers face challenges in bringing the right product to a constantly evolving market.
It is vital for developers to be aware of emerging trends to apply strategy to their business, she said.
Rathawat Kuvijitrsuwan, head of research and consulting at CBRE, said there are four overall risks in the property market: the development of the pandemic, government policies, international travel policies and spending power.
"There may be new variants of Covid-19," he said.
"It depends on how the vaccines respond to them and how the government and public react to the situation."
Mr Rathawat said the government's monetary policy, incentives, restrictions and other key decisions would have a significant impact on market movement.
Thailand's economic recovery depends on the return of foreign tourists and how each major feeder market's policies affect outbound and inbound travel, he said.
"GDP growth for 2022 was forecast at 3.4%, up from 0.9% last year. But this will largely depend on the number of inbound tourists and the export sector," said Mr Rathawat.
"With tourism a key economic driver, there are still many uncertainties ahead in determining local income."
He said the market recovery would be uneven and slow.
The residential market will need to rely on local demand as foreigners have yet to return. This drags down the sales rate as buyers will be end users who usually take a longer time to make a decision, said Mr Rathawat.
"Niche markets or those with solid demand drivers like projects near universities or branded residences will continue to perform despite the economic downturn. Resort homes will still be attractive to local buyers, but the price must be right," he said.
Mr Rathawat said consumer purchasing power will continue to be pressured by the pandemic.
Despite easing loan-to-value limits and low interest rates, affordability is still a significant factor, he said.
Last year the retail sector waned as the consumer confidence index dropped to a record low because of ongoing uncertainties and wavering restrictions.
"As one of the sectors most affected by Covid-19 and government restrictions, the retail industry will have to evolve together with these constraints," said Mr Rathawat.
He said there are three key trends in this sector: a greater focus on flexible rental structure to tackle uncertainties by offering turnover rent based on tenants' sales instead of fixed rental price; tenants' new plans for new brick-and-mortar branches that might be affected by the growing omni-channel popularity; and how to lure back customers to physical stores.