The Real Estate Information Center of the Government Housing Bank reports that the Current Situation Index for residential development entrepreneurs in Bangkok and its vicinity for Q1 2022 stands at 47.1, a decrease compared to the previous quarter (QoQ), and it has fallen below the neutral level of 50.0 once again. This reflects a further decline in confidence among entrepreneurs in conducting business during this quarter, following a slight increase above 50 in the previous quarter (Q4 2021).

Dr. Vichai Viratakphan, Acting Director of the Real Estate Information Center at the Government Housing Bank, stated that the decline in the confidence index this quarter is primarily due to the ongoing conflict between Russia and Ukraine, which has led to rising oil prices and construction material costs, particularly steel prices, which have surged by as much as 35% compared to the same period last year. Additionally, issues such as labor shortages in the construction sector, inflation, and interest rate hikes have contributed to entrepreneurs' concerns about conducting business in the current quarter.

When categorizing the entrepreneurs, it was found that the confidence index for Listed Companies in Q1 2022 is 51.1, which is above the neutral level of 50 but lower than the previous quarter's index of 56.3. This indicates that Listed Companies still have confidence in the current business environment, although it has decreased from the previous quarter.

In contrast, the confidence index for Non-listed Companies in Q1 2022 is 41.1, continuing to decline from the previous quarter's level of 45.5. This shows that smaller Non-listed Companies still lack confidence in the current business environment and have experienced a decrease in confidence from the previous quarter as well (see Table 1 and Chart 1).

Table 1: Current Situation Index

Source: Real Estate Information Center, Government Housing Bank

Chart 1: Current Situation Index

For the Expectations Index of residential development entrepreneurs in Bangkok and surrounding areas for the next 6 months, it is at 56.5, down from the previous quarter's level of 62.0. Entrepreneurs have shown a decrease in confidence across all areas, particularly regarding operational costs, where they are most concerned about potential increases in the next 6 months, with the operational cost index dropping to 24.3 from 26.5 in the previous quarter.

When categorizing the entrepreneurs by company type, it was found that Listed Companies have an expectations index of 60.5, down from 67.4 in the previous quarter, but still above the neutral level of 50.0, indicating a decrease in confidence across all areas.

Meanwhile, Non-listed Companies have an index of 50.5, down from 54.0 in the previous quarter, with a decrease in confidence in almost all areas, except for sales, where this group believes there will be an increase in the next 6 months compared to the previous quarter's index (see Table 2 and Chart 2).

Table 2: Expectations Index for the Next 6 Months

Chart 2: Expectations Index for the Next 6 Months

Source: Real Estate Information Center, Government Housing Bank