BANGKOK: The housing market will need to rely on foreign demand to stimulate growth, as domestic buyers are facing challenges in obtaining loans, evidenced by a decline in residential transfers in the first quarter of 2023.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the market in the first quarter was not as good as many developers had estimated in the fourth quarter of last year, reports the Bangkok Post.
“The figures in the first quarter, both in terms of supply and demand, showed negative trends,” he said. “The market is expected to have a double-digit decline this year, influenced by the expiration of the easing of the loan-to-value (LTV) limits at the end of last year.”
In the first quarter, the total number of housing transfers nationwide dropped 0.8% to 84,619 units from 85,320 units recorded during the same period last year.
However, there was an 8% increase in value, reaching B241 billion from B223bn, driven primarily by units in the high-priced segments.
Housing units priced between B7.5-10 million had a notable increase of 34%, and those priced above B10mn saw a rise of 22.6%. However, units priced below B3mn recorded decreases, ranging from 0.2% to 11.4%.
Out of the total units and value transferred in the first quarter of 2023, 3,775 units, accounting for 4.46% and valued at B17.1bn (7.1%), were purchased by foreign buyers.
All of these units were condos with an increase from 2.47% in terms of volume and 4.57% in terms of value in the same period of last year.
Among the foreign nationalities purchasing properties, Chinese nationals were the largest group, purchasing 1,747 units valued at B8.2bn, representing 46% and 48% of total purchases by foreign nationals, respectively.
Russian buyers accounted for 10% with 387 units worth B1.36bn, followed by American purchasers with 156 units valued at B703mn, accounting for 4% each.
The fourth and fifth positions were occupied by British and German buyers, with 146 units worth B653mn and 131 units worth B611mn, respectively.
Eighth place belonged to purchasers from Myanmar with 76 units worth B497mn.
On the supply side, the total number of newly launched residential units in Greater Bangkok decreased by 59% to 12,026 units in this year’s first quarter.
These units were valued at B65.1bn, reflecting a decline of 39% compared to the previous year.
The total number of land allocation permits nationwide or those for the development of low-rise houses saw a decline of 13.6% to 15,267 units.
This decrease can primarily be attributed to developers’ lack of confidence in demand following the expiration of the easing of the LTV limits last year.
“At present, it is difficult to predict the market conditions for 2023, as the positive and negative factors cannot be accurately identified until the new government is established,” he said.
REIC anticipates a 10.2% drop in the total number of residential transfers nationwide and a 4.5% decline in their overall value.
The forecast for the total number of newly launched residential units in Greater Bangkok is projected to be 98,132 units, valued at B505bn. This represents a decline of 10.5% and 8.2%, respectively, when compared with last year.
