The Thai real estate sector is facing challenges due to decreased consumer purchasing power, which has also affected the electrical appliance industry. Panasonic Solutions (Thailand) Co. Ltd. has observed a 10-15% reduction in sales from developer customers, indicating wider economic difficulties.
Thailand sees a sharp decline in residential sales
The Real Estate Information Center has reported that new residential sales in Thailand dropped to 15,000 units, worth ฿ 90 billion ($2.68 billion) in the first quarter of 2024. This marks a 26.6% decrease compared to the same period last year. This significant drop underlines the challenges faced by the real estate market amid the country’s slow economy.
Pongwut Sangprasert, director of the B2B sales division at Panasonic Solutions (Thailand), has noted that the downturn in the real estate sector has directly impacted the company’s performance.
Thai hospitality sector offers a glimmer of hope
Despite the grim outlook for residential real estate, the hospitality sector is showing signs of promise. The resurgence in tourism has prompted hotel operators to renovate their properties, creating opportunities for companies like Panasonic Solutions (Thailand). Currently, real estate customers make up 40% of the company’s B2B revenue, followed by commercial building customers at 20%, and hospitality customers at 10%. The company is confident about achieving 5-10% growth in the B2B sector this year, with plans to increase the B2B revenue proportion to 70% of total revenue within five years.
Innovative solutions for home comfort
Panasonic Solutions (Thailand) is currently working on a Home Internet of Things (IoT) solutions project called “Comfortable Environment,” in partnership with Chulalongkorn University, as part of an effort to diversify and innovate. The project’s goal is to create the ideal home living environment that balances the settings of home electrical appliances with human comfort. Initial testing indicates that a comfortable environment for Thais would consist of a room temperature of 26.3 degrees Celsius with an airflow of 0.2 meters per second.
This project is being funded by Japan’s New Energy and Industrial Technology Development Organization and is set to conduct pilot tests in 12 homes. The project is expected to be completed by the third quarter of 2025, with an IoT business solution launching by the end of that year.
Implications for property buyers and owners in Thailand
In Thailand, current market conditions offer both challenges and opportunities for property buyers and owners. The decrease in residential sales suggests potential price corrections, which could benefit buyers looking for deals. Meanwhile, the growth in the hospitality sector, driven by the rebound in tourism, indicates lucrative opportunities for investors focusing on commercial real estate. Additionally, innovations in home IoT solutions could add value to residential properties, making them more appealing to tech-savvy buyers and renters.
As the market adjusts, staying informed and adaptable will be key for navigating the evolving landscape of Thai real estate.
