Display mode (Doesn't show in master page preview)

2 Nov 2022

Real Estate and Construction

Uneven recovery seen in 2022 housing market, while a few supporting factors may inhibit growth in 2023 (Current Issue No.3355)


        In 2022, housing market indicators have exhibited improving signs, but unevenly. Amid increased confidence towards the recovery in the economy and tourism after the COVID-19 pandemic has eased, residential developers have begun to resume investment in more new projects. However, new home purchases have yet to fully rebound because the overall household purchasing power remains fragile on the back of the high cost of living and debts. Although the number of home ownership transfers may accelerate during the final two months of 2022 as the easing of LTV measures is set to expire at the end of 2022, that will depend on purchasing power and qualifications of prospective home buyers.
        Looking into 2023, KResearch is more cautious towards conditions within the housing market as we foresee only a few supporting factors while the Bank of Thailand has decided not to extend the easing of LTV measures, which are set to expire on December 31, 2022. Additionally, the market will have to monitor whether a reduction in the home purchase fee will be extended, or not while increased uncertainties surrounding the economy, fragile purchasing power, the upward trend in interest rates, intense competition and a high number of unsold housing units are bound to pressure home purchases and investment in the housing market, going forward.
        Given this, KResearch expects that the number of home ownership transfers (including juristic persons and individuals) in the Bangkok Metropolitan Area will reach roughly 175,000-182, 000 units, a contraction of 2.8 percent to growth of 1.1 percent, during 2023, against the projected growth of 7.5 percent for 2022. The number of new residential projects launched in 2023 is projected to decline to 89,000-96,000 units, a contraction of 6.3 percent to growth of 1.1 percent, versus the projected growth of around 57.1 percent for 2022.