The Real Estate Information Center of the Government Housing Bank reports that the Standard House Construction Price Index for Q3 2022 has shown a continuous increase, with the index value reaching 132.2, up 6.2% compared to the same period last year (YoY) and up 0.8% compared to Q2 2022 (QoQ). The factors contributing to the price index increase compared to the same period last year (YoY) include rising compensation in the construction design and system categories, with the highest increase of 8.0% in structural engineering compared to the same period last year.

Dr. Vichai Viratakpan, Acting Director of the Real Estate Information Center at the Government Housing Bank, revealed that the overall construction prices for houses in 2022 have continued to rise from Q1 to Q3. The Standard House Construction Price Index for Q3 2022 has increased to 132.2 points, which is 6.2% higher than the same period last year (YoY), marking the highest change rate in 19 quarters. This is attributed to the increase in oil prices, which affects both production and transportation costs. However, there is a trend of slowing down in the increase of house construction prices, as the change rate compared to the previous quarter (QoQ) has continuously decreased to 0.8% in Q3 from 3.9% and 1.1% in Q1 and Q2, respectively (see charts 1 - 2).

Analyzing the key components of the increase in the Standard House Construction Price Index in Q3 2022, it is found that construction prices have increased in almost every category compared to the previous year (YoY). In the construction design and system category, structural engineering has seen an increase of 8.0% from the previous year, while in the construction materials category, the highest increases were seen in sanitary ware at 13.2%, steel and steel products at 11.5%, and wood and wood products at 9.5%. Additionally, there has been a 5.6% increase in construction labor costs compared to the previous year. It is noted that only the price of tiles has slightly decreased by 3.2% compared to the same period last year (see tables 1 - 2).

From the analysis of the factors contributing to the increase in the Standard House Construction Price, it remains evident that the prices of most construction materials continue to rise, although they show a stable or slightly decreasing trend compared to the previous quarter (QoQ). Nevertheless, in Q4 2022, there are still risks from rising oil prices due to the war and increasing interest rates, which will impact the operational costs of producers and construction contractors.

1. Construction Design and System Category

  • Structural engineering has seen an increase of 8.0% compared to the same period last year (YoY) but decreased by -2.4% compared to Q2 2022 (QoQ), accounting for 28.8% of the design and system category.
  • Architectural work has increased by 5.7% compared to the same period last year (YoY) and increased by 2.4% compared to Q2 2022 (QoQ), accounting for 64.7% of the design and system category.
  • Sanitary system work has increased by 1.1% compared to the same period last year (YoY) but decreased by -1.5% compared to Q2 2022 (QoQ), accounting for 2.8% of the design and system category.
  • Electrical and communication system work has increased by 5.0% compared to the same period last year (YoY) but decreased by -0.1% compared to Q2 2022 (QoQ), accounting for 3.6% of the design and system category (see table 1).

2. Construction Materials Category

  • Wood and Wood Products prices increased by 9.5% compared to the same period last year (YoY) and increased by 1.3% compared to Q2 2022 (QoQ), accounting for 16.3% of the construction materials category.
  • Concrete Products prices increased by 4.7% compared to the same period last year (YoY) and increased by 0.3% compared to Q2 2022 (QoQ), accounting for 4.4% of the construction materials category.
  • Steel and Steel Products prices increased by 11.5% compared to the same period last year (YoY) but decreased by -12.2% compared to Q2 2022 (QoQ), accounting for 6.1% of the construction materials category.
  • Tiles prices decreased by -3.2% compared to the same period last year (YoY) and remained unchanged compared to Q2 2022 (QoQ), accounting for 3.1% of the construction materials category.
  • Sanitary Ware prices increased by 13.2% compared to the same period last year (YoY) and remained unchanged compared to Q2 2022 (QoQ), accounting for 2.0% of the construction materials category.
  • Electrical and Plumbing Equipment prices increased by 4.2% compared to the same period last year (YoY) but decreased by -0.9% compared to Q2 2022 (QoQ), accounting for 3.8% of the construction materials category.
  • Other Construction Materials prices increased by 4.8% compared to the same period last year (YoY) but decreased by -2.7% compared to Q2 2022 (QoQ), accounting for 24.6% of the construction materials category (see table 2).

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Data Compilation Method

The Real Estate Information Center of the Government Housing Bank, in collaboration with the Home Builders Association, compiles the Standard House Construction Price Index quarterly, using the year 2010 as the base year. The "Happy Thai Family 5" house model from the Department of Public Works and Town & Country Planning is used to calculate construction costs, which is a two-story house with a usable area of 169 square meters, assuming a construction period of approximately 180 days. The construction cost includes operational costs and value-added tax but excludes land prices and land development costs such as filling and leveling expenses. The construction design and system categories used to calculate the index include structural engineering, architectural work, sanitary systems, electrical and communication systems, and other works. For the construction materials category, wholesale prices of construction materials in Bangkok from the Ministry of Commerce are used, and for the labor category, the minimum wage data from the Ministry of Labor is used to compile the index.

Precautions for Data Use

The Standard House Construction Price Index is compiled to measure changes in the construction prices of houses that the public hires contractors to build one at a time, but it cannot be used to measure changes in the construction prices of housing developments built by developers who hire contractors to build multiple houses at once.