Rising housing prices and interest rates coupled with reduced purchasing power are expected to drive demand for second-hand homes in preferred locations at more affordable prices, according to the Real Estate Information Center (REIC).
Vichai Viratkapan, the agency's acting director-general, said the second-hand home market is seeing growth in both supply and demand because of the economy.
"The supply side is being bolstered by a rising number of second-hand residential properties from financial institutions and asset management firms," he said.
"This growth is prevalent amid the economic slowdown."
Supply in the second-hand market also derived from condo units owned by investment buyers who previously had numerous residential properties for rent in their portfolio and now want to divest to diversify into other asset classes.
On the demand side, rises in interest rates and construction costs for new homes reduced the purchasing power for residential units in preferred locations. As a consequence, second-hand properties are the best alternative, said Mr Vichai.
He said the majority of local customers looking for second-hand homes were in lower-priced segments with unit prices of 1.5 million baht and lower, as no new supply was launched at these prices.
People browse house and condo deals at a property fair. Houseandcondoshow Facebook page
"Second-hand homes are a better choice for buyers seeking affordability in convenient locations, especially when new supply is offered at higher prices," said Mr Vichai.
Many foreign buyers sought units in inner-city areas, but the scarcity of land plots for new residential development led them to choose second-hand units, he said. These options were not only more affordable, but also larger.
During the first nine months of 2023, the proportion of second-hand condos transferred to foreign buyers rose to 40% from a peak of 37% in the second quarter of 2022.
Last month, the Housing Finance Association organised the NPA Grand Sale 2023 where non-performing assets (NPAs) and second-hand properties from financial institutions and asset management firms were introduced. The three-day event posted 1.17 billion baht in sales.
A survey at the event found the most sought-after second-hand properties were condos (36.7%), with the top location being Chatuchak district, near Lat Phrao MRT station and the Yellow Line.
The most desired units were one-bedroom spaces ranging from 31 to 50 square metres, priced 3-5 million baht.
The No.2 residential choice were single detached houses (35.6%) located in Sai Mai, Klong Sam Wa and Bang Khunthian districts.
Buyers showed interest in units sized 50-60 square wah, featuring three bedrooms and two bathrooms, priced 3-5 million baht.
Third were townhouses (27.7%) in Sai Mai, Klong Sam Wa and Prawet districts sized 16-25 sq w with two storeys, three bedrooms and two bathrooms, priced at less than 3 million baht.