Bangkok condos face decline as Gen Z opts for renting, shifting focus to Gen Y

Bangkok and its surrounding provinces are experiencing a decline in condominium transfers because the youthful technology, Gen Z, is opting to rent rather than buy properties. The ttb analytics centre predicts a 12.5% drop in transfers this year. Experts advise developers to attract Gen Y buyers with excessive financial readiness.
In their current evaluation, ttb analytics identified that condo gross sales in Bangkok and adjacent provinces are under stress because of the behavioural differences of Gen Z buyers. Primarily driven by way of life preferences and financial limitations, these individuals are leaning towards renting properties instead of purchasing for. As Privacy , rental transfers are anticipated to shrink between eight.4% and 12.5%.
Property developers are urged to adapt their strategies towards smaller households of the Gen Y class, who’re financially sound and eager to make property purchases. This era presents a possible treatment for slowing rental sales and catering to the altering preferences of homebuyers. During the previous year, property transfers hit a record 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 adjoining provinces has been on a transparent decline in comparability with the the rest of the country. Bangkok and neighbouring locations have seen switch values lower from a median of 67% over the previous five years to only 34% in 2023. Furthermore, the property sales market is dealing with structural challenges, pushing the sector into the ‘Generation Rent’ era. This, combined with the increase in transfer values, resulted in additional people opting to lease as an alternative of purchase.
There are two key drivers propelling the shift towards renting among the Gen Z population, aged between 14 and 28 years old. Firstly, the disconnect between the revenue ranges of this era and the pricing of condominiums in the central enterprise districts is obvious. Secondly, the construction of the property market has elevated the cost of newly constructed condos, with building materials costs rising by 16.3%. Consequently, renting turns into a extra appealing choice because it provides flexibility in case of job modifications..

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