Southeast Asian real estate developers face oversupply

Real estate developers in the Philippines, Thailand and Vietnam are facing concerns about oversupply due to weak consumer demand.

Many real estate developers are having to scale back new housing projects - Photo: BLOOMBERG

Quoting Ms. Ada Choi, CBRE's research director in Asia-Pacific, Singapore's Business Times on March 12 said that high interest rates, strict mortgage lending standards and household debt are contributing to the housing surplus in the Philippines, Thailand and Vietnam.

Many real estate developers are having to scale back new housing projects.

In the Philippines market , the stunning sunset views of Manila Bay are not enough to attract condo buyers. This commercial hub of the Philippines and other cities are seeing a significant slowdown in home sales.

At the current pace, it would take more than eight years to sell the 74,000 condominium units currently on the market, according to data from Colliers International Philippines.

Demand for condominiums fell 61% to about 9,000 units last year, the lowest in at least nine years, Colliers data shows.

Another 11,000 apartments will hit the market in the fall, which would be the lowest number of new condominiums for sale in a year since at least 2016 and just a fifth of the 56,000 introduced in 2019.

Meanwhile, in the Thai market , "the number of condominiums and other residential properties sold in 2024 was very disappointing, with a decrease of more than 30%," said Prasert Taedullayasatit, president of the Thai Condominium Association.

Thailand's property market is expected to be even tougher this year, said Nuttaphong Kunakornwong, chief executive officer of SC Asset Corp PCL, controlled by the family of Prime Minister Paetongtarn Shinawatra.

“We are exploring other areas, such as logistics, hotels and other commercial properties, for income growth to replace the weak outlook of our main residential properties,” Nuttaphong added.

In the Vietnamese market , developers have also focused on producing too many high-end houses without paying attention to affordable housing, leading to a shortage of apartments suitable for the majority of buyers in big cities like Hanoi and Ho Chi Minh City.

A shortage of affordable housing has pushed up prices, making them unaffordable for low- and middle-income earners, according to the Vietnamese government.

Prime Minister Pham Minh Chinh has called on relevant ministries and sectors to develop policies to promote social housing development, and asked developers to focus on the need for affordable housing suitable for the majority of Vietnamese people.

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Source: https://tuoitre.vn/cac-nha-phat-trien-bat-dong-san-dong-nam-a-doi-mat-tinh-trang-cung-vuot-cau-20250313150354707.htm