The Real Estate Information Center of the Government Housing Bank reports the housing price index for properties on sale in Q2 2021, indicating a continuous decline in the price index for both housing projects and condominium projects. The index for new housing projects on sale in Bangkok and its vicinity for Q2 2021 stands at 127.8, a decrease of -0.4% compared to the same period last year (YoY), marking the second consecutive quarter of decline. Meanwhile, the index for new condominiums on sale in Bangkok and surrounding areas for Q2 2021 is at 152.0, down by -0.8% YoY, reflecting a continuous decline for the third consecutive quarter.

Dr. Vichai Viratakphan, the bank inspector and acting director of the Real Estate Information Center, stated that the index for new housing projects on sale in Bangkok and its vicinity for Q2 2021 is at 127.8, a decrease of -0.4% YoY, marking a continued decline for the second quarter. When comparing the index with the previous quarter (QoQ), it shows a further decrease of -0.3% after a slight increase of +0.3% in Q1.

When analyzing the index for housing projects by area, the index for projects in Bangkok is at 126.7, down by -0.5% YoY and -0.3% QoQ. For housing projects in the three surrounding provinces (Nonthaburi, Pathum Thani, and Samut Prakan), the index is at 128.7, down by -0.3% YoY and -0.2% QoQ (see Table 3 and Charts 1 - 3).

Additionally, the index for single-family homes in Bangkok and its vicinity for Q2 2021 is at 126.0, down by -0.5% YoY and -0.3% QoQ.

The index for townhouses in Bangkok and surrounding areas for Q2 2021 is at 129.7, down by -0.4% YoY and -0.3% QoQ.

The decline in the new housing price index reflects the impact of the third wave of COVID-19 during this quarter, which is a significant negative factor affecting the Thai economy, leading to a slower recovery than previously anticipated. Developers are concerned about the situation, as they continue to employ marketing strategies by reducing prices to stimulate sales of housing projects, alongside offering promotions such as freebies and discounts on transfer fees, primarily to alleviate the financial burden on buyers while still implementing price reductions.

 

Table 1: New Housing Price Index for Properties on Sale in Bangkok - Surrounding Areas (Year 2012 = 100.0)

Chart 1: New Housing Price Index for Properties on Sale in Bangkok - Surrounding Areas (Year 2012 = 100.0)

Chart 2: Growth Rate of the New Housing Price Index for Properties on Sale in Bangkok - Surrounding Areas Compared to the Same Period Last Year (YoY)

Chart 3: Growth Rate of the New Housing Price Index for Properties on Sale in Bangkok - Surrounding Areas Compared to the Previous Quarter (QoQ)

Table 2: Single-Family Home Price Index in Bangkok - Surrounding Areas (Year 2012 = 100.0)

Table 3: Townhouse Price Index in Bangkok - Surrounding Areas (Year 2012 = 100.0)

From the survey of promotional offers for new housing projects on sale this quarter, it was found that the majority, 40.8%, consisted of freebies such as air conditioners, furniture, curtains, water pumps, water tanks, etc. Following that, 32.4% were discounts on transfer fees and/or free maintenance fees, and 26.8% were cash discounts (in Q1 2021, the highest promotional offer was discounts on transfer fees and/or free maintenance fees at 46.6%, followed by freebies at 32.8% and cash discounts at 20.5%) (see Chart 4).

Chart 4: Comparison of Promotional Offers for Housing Projects on Sale in Q1 - Q2 2021

For the new condominium price index for properties on sale in Bangkok - Surrounding Areas for Q2 2021, the index stands at 152.0, down by -0.8% YoY, marking a continuous decline for the third consecutive quarter. The index compared to the previous quarter (QoQ) shows a further decrease of -0.1% from Q1 2021 (the first QoQ increase after the new condominium price index had been declining every quarter in 2020).

In Q2 2021, when analyzing the new condominium price index by area, it was found that in Bangkok, the index is at 153.5, down by -0.9% YoY and -0.1% QoQ, while in the two surrounding provinces, the index is at 144.6, down by -0.3% YoY and -0.5% QoQ (see Table 1 and Charts 1 - 2).

 

The new condominium price index indicates that prices for new condominiums are also on a downward trend, resulting from the third wave of COVID-19, which has slowed the economy and affected income, employment, and purchasing power for housing among the public. Additionally, the group of buyers purchasing condominiums for investment purposes has decreased due to economic conditions and investment confidence in real estate, as well as restrictions on foreign buyers and travel limitations, which were previously significant purchasing forces in the Bangkok - surrounding areas condominium market.

From the survey of new condominium prices this quarter, it was found that most developers continue to employ aggressive marketing strategies, particularly for completed projects. Up to 50.0% of the surveyed projects offered promotions in the form of freebies, such as furnished decorations and electrical appliances ready for occupancy. Following that, 28.5% offered cash discounts and/or free occupancy for the first 1-2 years, or assistance with mortgage payments for the first 1-2 years. Developers calculate the monthly payments to be made to the bank for the first 1-2 years, while 21.5% offered cash discounts on transfer fees (in Q1 2021, the proportion of promotional offers in the form of freebies was as high as 46.1%, followed by cash discounts at 35.1% and discounts on transfer fees at 18.9%) (see Chart 3). These promotions can help expedite the decision-making process for buyers who still have purchasing power and the ability to secure loans, which is one reason for the decline in new condominium prices, and it is expected that this trend will continue.

Table 1: New Condominium Price Index for Properties on Sale in Bangkok - Surrounding Areas (Year 2012 = 100.0)

Chart 1: New Condominium Price Index for Properties on Sale in Bangkok - Surrounding Areas (Year 2012 = 100.0)

Chart 2: Growth Rate of the New Condominium Price Index for Properties on Sale in Bangkok - Surrounding Areas Compared to the Same Period Last Year (YoY)

Chart 3: Comparison of Promotional Offers for New Condominiums on Sale in Q1 - Q2 2021

The new housing price index for properties on sale includes the price index for single-family homes and townhouses in new housing projects that are still on sale, defined as projects with at least 6 units available for sale. This price index does not include second-hand homes.

The data collection area includes Bangkok and its vicinity, comprising only four provinces: Bangkok, Nonthaburi, Pathum Thani, and Samut Prakan.

The sampling method for this price index uses purposive sampling with 245 samples. The sale prices used to compile this index are actual sale prices, excluding the value of promotional offers from the listed prices, using the year 2012 as the base year.

 

Data Compilation Method

The new condominium price index for properties on sale refers to the prices of condominiums in projects with at least 6 units available for sale. This index does not include second-hand condominiums.

The data collection area includes Bangkok and its vicinity, comprising only three provinces: Bangkok, Nonthaburi, and Samut Prakan.

The sampling method for this price index uses simple random sampling with 150 samples. The sale prices used to compile this index are actual sale prices, excluding the value of promotional offers from the listed prices, using the year 2012 as the base year.