A gloomy outlook for residential prices awaits the real estate industry this year, but there are signs a recovery could happen by 2022, according to property tech firm Juwai IQI.
Executive chairman Georg Chmiel said the company tracked the evolution of expectations for prices, rentals and market activity trends, based on a survey of 196 Thai real estate agents between Feb 12 and March 2.
By the end of 2020, prices are expected to drop by 2.4% before climbing 5.6% by the end of 2021.
Chiang Mai will see the highest jump of 12.8% next year after facing a downturn of 2.8% this year. Bangkok is likely to face the biggest swing as prices are projected to fall by 4.9% by the end of this year and increase 7.4% by the end of 2021.
The only market with a positive outlook in both 2020 and 2021 was Phuket, with a projection of 1.7% growth this year and 5.5% next year.
The forecast for rentals is generally negative, with a drop of 2.6% by the end of 2020.
In Bangkok rentals were expected to drop 2.9% this year, while in Chiang Mai the outlook is a dip of 2.1% this year and a nosedive of 11.9% next year.
The survey shed light on nationwide new residential sales, where foreign buyers accounted for 31% of transactions, the top share in the market.
This group also accounted for 31% of the secondary market around the country.
First-time local buyers made up 26% of the new home market, followed by local investors and local buyers who were upgrading at 24% and 19%, respectively.
In Bangkok, foreign buyers represented 28% of new home transactions and 25% of secondary market purchases.
Making up an equally large share in the capital was local first-time buyers at 28% of new home purchases and 27% of secondary market purchases.
In Chiang Mai, first-time local buyers were the largest segment for new project sales at 33%, while foreign buyers accounted for 27%, followed by local investors and local upgrade buyers at 24% and 17%.
In Phuket, foreign buyers dominated new home and secondary market purchases, comprising 41% of the new home market and 41% of secondary purchases.
In Chon Buri, overseas clients made up the lion's share of new residential purchases with 36%, as well as 31% of secondary purchases.
Nationwide, 35% of agents reported that foreign buyers would make more purchases in the year to come compared to 2019.
Some 31% of agents expected local investors to increase the number of transactions they make in the coming year, while 29% expected first-time local buyers and local upgrade buyers to be more active in the coming year.
Bangkok had the strongest forecast for transaction growth across all categories of buyers.
About 45% of agents in the capital expected first-time local buyers to complete more transactions in the coming year.