NPA market offers opportunities amid rising new-build costs

Non-performing assets emerging as increasingly attractive option for homebuyers, investors

 

As new property prices in Thailand continue their upward trajectory, non-performing assets (NPAs) are emerging as an increasingly attractive option for both homebuyers and investors seeking value.

 

In a climate of persistent economic challenges, the second-hand property market, particularly distressed assets, is offering well-located properties at competitive prices.

 

Darunee Rungruangphon, managing director of Darvid Property Service, reports a consistent annual increase in the number of NPAs. 

 

This trend is attributed to economic pressures affecting borrowers' ability to meet mortgage repayments, compelling financial institutions to expedite asset disposal through substantial price reductions, often ranging from 10% to 30%. 

 

This includes a variety of property types, from condominiums and townhouses to detached houses and commercial buildings such as shophouses and warehouses. 

For investors, NPAs present a compelling opportunity to acquire assets below market value in prime locations, typically situated in high-potential economic areas with excellent transport links.

 

While the cost of new builds, especially in the Greater Bangkok area, continues to rise due to increased construction expenses, NPAs are being promoted through sales campaigns. This makes them an appealing choice for price-sensitive buyers.

 

Second-hand homes in desirable locations, such as townhouses and detached houses in thriving communities, offer the advantage of acquiring a property below market value in a sought-after area. This is attracting both owner-occupiers and investors.

 

Financial institutions have also adapted their marketing strategies by launching targeted price-reduction campaigns and promotional offers to stimulate interest in NPAs.

 

A key driver of NPA attractiveness is financial institutions' ability to offer these assets at competitive prices thanks to their need for rapid disposal. Price reductions provide a significant opportunity for buyers, particularly in the extensive second-hand property market.
  

Commercial properties such as shophouses are also proving popular with investors seeking assets in high-potential locations. NPAs in commercial areas offer the advantage of immediate development for business use, unlike new builds, which are often located in less accessible areas.

 

While residential NPAs appeal to buyers seeking well-located second-hand homes, the continued rise in new-build costs is making NPAs in prime locations even more attractive.

 

Properties in established communities, near transport hubs or educational institutions, offer investors the potential for long-term capital appreciation through rental income or future sales.

(2025/03/11-00:00)