Bangkok and its surrounding provinces are experiencing a decline in condominium transfers as the younger technology, Gen Z, is opting to rent rather than buy properties. The ttb analytics centre predicts a 12.5% drop in transfers this yr. Experts advise developers to attract Gen Y consumers with excessive financial readiness.
In their recent analysis, ttb analytics pointed out that condo sales in Bangkok and adjoining provinces are beneath stress as a outcome of behavioural differences of Gen Z buyers. Primarily driven by way of life preferences and monetary limitations, these people are leaning in the direction of renting properties as an alternative of purchasing for. As a end result, rental transfers are expected to shrink between 8.4% and 12.5%.
Under wraps are urged to adapt their strategies in the course of smaller households of the Gen Y class, who are financially sound and desperate to make property purchases. This era offers a possible remedy for slowing rental sales and catering to the changing preferences of homebuyers. During the past year, property transfers hit a document excessive of 1.05 trillion baht, with sixty one.9% of the worth linked to housing transactions in Bangkok and surrounding areas.
Interestingly, the market share of residential properties in Bangkok and adjacent provinces has been on a transparent decline compared to the the rest of the nation. Bangkok and neighbouring areas have seen switch values decrease from a mean of 67% over the previous five years to solely 34% in 2023. Furthermore, the property sales market is facing structural challenges, pushing the sector into the ‘Generation Rent’ era. This, combined with the rise in transfer values, resulted in additional individuals opting to hire as an alternative of purchase.
There are two key drivers propelling the shift towards renting among the Gen Z inhabitants, aged between 14 and 28 years previous. Firstly, the disconnect between the earnings levels 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 price of newly constructed condos, with building materials costs rising by 16.3%. Consequently, renting turns into a extra interesting possibility because it offers flexibility in case of job adjustments..