[SINGAPORE] Developers in the Philippines, Thailand and Vietnam are facing oversupply concerns on weak consumer demand, with some scaling back new residential projects.
Elevated interest rates, tough mortgage lending criteria and household debt are contributing to the housing glut, said Ada Choi, CBRE’s head of research in Asia Pacific.
Here are snapshots of the three markets:
Philippines
Manila Bay’s scenic sunsets are not enough to lure condominium buyers. The commercial hub, and other cities, are experiencing a dramatic slowdown in home sales. At the current pace, it will take more than eight years to unload 74,000 condominium units that are on the market now, according to data from Colliers International Philippines.
Demand for condominiums dropped 61 per cent to around 9,000 units last year, the lowest in at least nine years, the Colliers data showed. An additional 11,000 units that will hit the market in the fall will be the lowest offering of new condos in a single year since at least 2016, and just a fifth of the 56,000 units introduced in 2019.
Thailand
“The number of condominiums and other residential properties being sold in 2024 were so demoralising, with a more than 30 per cent slide,” said Prasert Taedullayasatit, president of the Thai Condominium Association.
Thailand’s real estate market is expected to be even tougher this year, said Nuttaphong Kunakornwong, chief executive officer of SC Asset Corp PCL, which is controlled by the family of Prime Minister Paetongtarn Shinawatra. “We are exploring other areas, such as logistics, hotels and other commercial properties, for earnings growth to substitute for the weak outlook of our main residential properties,” Nuttaphong added.
Vietnam
Developers have focused on producing too many high-end homes at the expense of affordable housing, resulting in a shortage of units suitable for the majority of buyers in major cities such as Hanoi and Ho Chi Minh City, according to the government.
The dearth of affordable homes pushes up prices, putting them out of reach for those with low and middle incomes, it said. Prime Minister Pham Minh Chinh has called on government officials to develop policies to boost the construction of more affordable homes and asked developers to focus on the housing needs of most Vietnamese. BLOOMBERG
