Dr. Vichai Wiratthakhan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center (REIC) stated that in 2023, the overall real estate market index (residential sector) is expected to slightly decline from 2022, projected at 90.2 points, representing a decrease of 1.6%. In a worst-case scenario, it could drop by as much as 11.5%.

Overall, the real estate market is facing more negative factors than in 2022, particularly the end of the LTV relaxation measures, which will impact those looking to purchase homes for residence and investment, especially for second and third homes, which account for about 30%. Additionally, the transfer fee reduction has changed from 0.01% to 1% this year, meaning buyers will now pay 10,000 baht per million instead of 100 baht. This will affect the overall purchasing power of the public. Furthermore, attention must be paid to the rising interest rates, which could increase by 0.75-1.0%, along with the majority of housing prices adjusting upwards directly and indirectly (less discounts/gifts), contrary to the high household debt levels, leading financial institutions to be cautious and strict regarding loan approvals.

Regarding the supply and demand direction for housing in 2023, it is expected that supply will remain stable to slightly slow down, with approximately 98,132 new housing units projected to launch in the Bangkok metropolitan area, a decrease of 2.1%. Of these, condominiums are expected to number around 40,086 units, down 22.4%, while housing projects will see an increase to 58,046 units, up 19.4%.

On the other hand, demand is expected to decrease, with an estimated 352,761 housing transfer units in 2023, a drop of 10.2%, valued at approximately 1,016,838 million baht, down 4.5%. This is a result of the end of the LTV relaxation measures in 2022, combined with rising interest rates and household debt, which will affect the transfer of both new and second-hand homes.

For horizontal housing in 2023, it is expected that there will be 264,571 transfers, a decrease of 7.4%, valued at approximately 753,628 million baht, down 2.9%. Condominiums are expected to see around 88,190 transfers, a decrease of 17.7%, valued at approximately 263,210 million baht, down 8.8%. The total new housing loans nationwide in 2023 may amount to approximately 650,764 million baht, down 6.8%, while the outstanding housing loans nationwide are expected to be around 4,955,985 million baht, an increase of 4.5% compared to 2022.

However, in the first half of 2023, the foreign market may not recover as expected due to the economic conditions of foreign client countries not being favorable. Meanwhile, the returns on Thai real estate remain lower than those in neighboring countries, which does not attract many investors. Nonetheless, it is anticipated that the foreign market may return to purchase Thai real estate in the latter half of the year.

For the horizontal housing segment in 2023, it is observed that most developers are increasingly targeting homes priced at 10 million baht and above, partly because this customer group is less affected by the economic situation. However, caution is advised regarding the volume of new homes entering the market in 2023, which may exceed actual customer demand.