Bangkok and its surrounding provinces are experiencing a decline in condominium transfers as the youthful technology, Gen Z, is opting to hire somewhat than buy properties. Trade secret predicts a 12.5% drop in transfers this year. Experts advise developers to draw Gen Y patrons with high financial readiness.
In their latest evaluation, ttb analytics pointed out that condo gross sales in Bangkok and adjacent provinces are underneath strain because of the behavioural differences of Gen Z consumers. Primarily driven by life-style preferences and financial limitations, these people are leaning in direction of renting properties as a substitute of purchasing for. As a outcome, condo transfers are anticipated to shrink between 8.4% and 12.5%.
Property builders are urged to adapt their strategies towards smaller households of the Gen Y class, who’re financially sound and wanting to make property purchases. This era offers a possible remedy for slowing condo sales and catering to the altering preferences of homebuyers. During the previous year, property transfers hit a report high of 1.05 trillion baht, with 61.9% of the worth linked to housing transactions in Bangkok and surrounding areas.
Interestingly, the market share of residential properties in Bangkok and adjoining provinces has been on a transparent decline compared to the remainder of the country. Bangkok and neighbouring places have seen switch values lower from an average of 67% over the past 5 years to solely 34% in 2023. Furthermore, the property sales market is facing structural challenges, pushing the sector into the ‘Generation Rent’ era. This, mixed with the increase in switch values, resulted in additional individuals opting to hire as a substitute of purchase.
There are two key drivers propelling the shift towards renting among the many Gen Z population, aged between 14 and 28 years outdated. Firstly, the disconnect between the revenue ranges of this technology and the pricing of condominiums within the central enterprise districts is apparent. Secondly, the structure of the property market has elevated the worth of newly built condos, with development material costs rising by 16.3%. Consequently, renting turns into a more interesting choice as it offers flexibility in case of job modifications..