The Real Estate Information Center of the Government Housing Bank has revealed that the confidence index of residential property developers in Bangkok and its vicinity for Q3 2022 has shown a continuous increase from Q2 2022, although concerns about rising operational costs remain.

Dr. Vichai Viratakpan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center stated that the confidence index for residential property developers in Q3 2022 improved compared to the previous quarter and the same period last year. The index rose to 51.8, up from 49.8 in the previous quarter (QoQ) and from 47.1 a year ago (YoY), indicating a positive trend in confidence among property developers for two consecutive quarters after a significant decline in Q1 2022.

Both Listed and Non-listed Companies showed improvement in Q3, with Listed Companies exhibiting a higher level of confidence compared to Non-listed Companies. The index for Listed Companies increased by 3.1 points from 54.9 to 58.0, while Non-listed Companies saw a modest increase of 0.4 points from 42.2 to 42.6. The Non-listed Companies remain below the neutral level of 50.0, having been under this threshold for 14 consecutive quarters since Q2 2019, indicating a significant concern among Non-listed Companies compared to their Listed counterparts.

 

 

However, in Q3 2022, the real estate sector still faces significant negative factors that create concerns for operators. These include rising oil prices affecting construction material costs, inflation, and the upward trend of interest rates. This is clearly reflected in both Listed and Non-listed Companies, which have concerns about operational costs, currently at a low level of 28.6. Additionally, Non-listed Companies exhibit lower confidence regarding performance, sales, new project launches, and employment.

Regarding the overall confidence level of residential property developers in Bangkok and its vicinity for business operations in the next six months, there has been a slight increase from the previous quarter by 1.3 points to 57.9, with confidence levels above the neutral mark of 50.0 in almost all areas, except for operational costs in the upcoming six months.

 

 

In this regard, the confidence index for Listed Companies in the next six months is at 61.8, an increase of 0.2 points from the previous quarter, indicating that operators are relatively confident in their residential development business. Meanwhile, Non-listed Companies have a confidence index of 52.1 for the next six months, which is above the neutral level of 50.0 and higher than the previous quarter's level of 49.1, showing that Non-listed Companies are also beginning to gain confidence in their business operations for the next six months. However, both groups remain concerned about operational costs, which are at a relatively low confidence level due to rising interest rates, land prices, construction costs, labor wages, and business overheads, which are expected to continue increasing in the next six months.