The Real Estate Information Center of the Government Housing Bank (REIC) has released a report on the supply and demand survey of residential projects currently for sale for Q2 2023 in the Bangkok metropolitan area. The survey focused on projects with at least 6 units available for sale. It was found that the total number of residential units offered for sale increased by 3.3%, while new launches decreased by 19.0% compared to the same period last year. Meanwhile, new sales dropped by 32.3%. The overall situation is concerning, especially for condominium projects, which saw an 11.2% increase in unsold units.

Overall Housing Market Situation (Single-Family and Condominiums) Declines Sharply

Dr. Vichai Viratakphan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center stated that the overall housing market in Bangkok and five surrounding provinces in Q2 2023 saw a total of 206,246 residential units offered for sale (both single-family homes and condominiums) valued at 1,019,318 million baht, representing a growth of 3.3% and 5.3%, respectively, compared to the same period last year. This total includes only 23,080 new units launched, accounting for just 11.19% of all units offered for sale, valued at 127,774 million baht or 12.54% of the total value offered, both down from the previous year by 19.0% and 6.6%, respectively. The breakdown includes 11,224 single-family home projects valued at 80,299 million baht, a decrease of 7.8%, and 11,856 condominium projects, down 27.3% with a project value of 47,475 million baht, which increased by 5.9%.

Regarding sales, it was found that in Q2, a total of 15,959 residential units were sold, with a total project value of 83,499 million baht. This represents a decrease of 32.3% in units and 28.4% in value. Among these, new sales of condominium projects accounted for 5,909 units, valued at 24,900 million baht, showing a decline of 56.5% in units and 53.1% in value. In contrast, single-family home projects saw 10,050 units sold, valued at 59,490 million baht, with a slight increase of 0.7% in units but a decrease of 8.9% in value.

For remaining residential units, it was found that in Q2 2023, there were a total of 190,287 unsold units, an increase of 8.0%, valued at 935,819 million baht, which is a 9.9% increase. This includes 74,230 condominium units, up 11.2%, valued at 290,637 million baht, down 1.3%, and 116,057 single-family homes, up 6.1%, valued at 645,182 million baht, up 15.8%.

Single-Family Housing Market Situation

When analyzing the single-family housing market specifically for Q2 2023 in the Bangkok metropolitan area, it was found that there were 126,107 single-family residential units offered for sale, valued at 704,672 million baht, representing a growth of 5.7% and 13.2%, respectively, compared to the same period last year. Notably, single-family homes saw the highest growth in units offered, totaling 32,947 units, with a growth rate of 15.9%. It is noteworthy that townhouses are the only type of single-family housing that saw a slight decrease in units offered, totaling 69,356 units, down 0.3%.

In terms of new sales for Q2 2023, single-family housing units totaled 10,050, with a growth of 0.7% and a value of 59,490 million baht, down 8.9%. The absorption rate remained stable at 2.7, indicating that the single-family housing market is relatively stable, similar to Q1 2023. It was found that the number of new sales in all types of single-family housing projects has increased above the average since the COVID-19 pandemic, with commercial buildings and duplex homes showing the highest growth rates of 26.1% and 25.6%, respectively, while townhouses saw a decrease of 7.5%. Single-family homes saw a slight increase of 3.3%, but it is noteworthy that the number of new townhouse projects launched also decreased by 15.5%.

However, when considering the remaining units in the single-family housing projects, it was found that single-family homes still have the highest number of unsold units, increasing by 17.1%, while duplex homes increased by 11.7% and townhouses by 0.4%. In contrast, commercial buildings saw a decrease of 0.9% in unsold units. Overall, the absorption rate for single-family homes and townhouses has decreased from the previous year, while duplex homes and commercial buildings have improved due to new project launches and a limited supply of such housing types in the market.

Condominium Market Situation

In Q2 2023, the condominium market in the Bangkok metropolitan area saw 80,139 units offered for sale, valued at 314,646 million baht, with a decrease of 0.3% in units and 8.9% in value compared to the same period last year. Among these, new condominium projects launched totaled 11,856 units, down 27.3%, with a project value of 47,475 million baht, up 5.9%. The new sales of condominiums in Q2 2023 totaled 5,909 units, down 56.5%, with a value of 24,009 million baht, down 53.1%, resulting in a total of 74,230 unsold units, an increase of 11.2%, valued at 290,637 million baht, down 1.3%.

5 Potential Areas for Single-Family Housing

The field survey also revealed potential areas for the single-family housing market in Q2 2023, with the highest sales and absorption rates, including:

(1) Bangplee-Bangbo-Bangsaothong: 1,727 units sold, valued at 9,962 million baht, with an absorption rate of 3.5% per month.

(2) Samut Prakan City-Phra Pradaeng-Phra Samut Chedi: 995 units sold, valued at 3,585 million baht, with an absorption rate of 3.3% per month.

(3) Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi: 992 units sold, valued at 5,047 million baht, with an absorption rate of 1.9% per month.

(4) Samut Sakhon City: 933 units sold, valued at 3,744 million baht, with an absorption rate of 4.5% per month.

(5) Lam Luk Ka-Thanyaburi: 882 units sold, valued at 3,642 million baht, with an absorption rate of 1.9% per month.

For areas to watch due to high remaining units, despite some areas having good sales and absorption rates, include:

(1) Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi: 16,811 units remaining, valued at 83,218 million baht, with an absorption rate of 1.9% per month.

(2) Bangplee-Bangbo-Bangsaothong: 14,689 units remaining, valued at 79,073 million baht, with an absorption rate of 3.5% per month.

(3) Lam Luk Ka-Thanyaburi: 14,501 units remaining, valued at 57,010 million baht, with an absorption rate of 1.9% per month.

(4) Khlong Luang-Nong Suea: 13,112 units remaining, valued at 46,477 million baht, with an absorption rate of 1.4% per month.

(5) Pathum Thani City-Lat Lum Kaeo-Sam Khok: 10,344 units remaining, valued at 42,653 million baht, with an absorption rate of 1.9% per month.

The highest remaining units for single-family homes are in the price range of 3.01-5.00 million baht, with 37,068 units remaining, valued at 151,278 million baht. The second highest is in the price range of 2.01-3.00 million baht, with 34,924 units remaining, valued at 95,177 million baht, and the third highest is in the price range of 5.10-7.50 million baht, with 17,406 units remaining, valued at 110,101 million baht.

5 Potential Areas for Condominium Projects

For the potential areas of the condominium market in Q2 2023, with the highest sales and absorption rates, include:

1. Huai Khwang-Chatuchak-Din Daeng: 699 units sold, valued at 2,497 million baht, with an absorption rate of 2.0% per month.

2. Khlong Luang-Nong Suea: 656 units sold, valued at 1,610 million baht, with an absorption rate of 8.7% per month.

3. Nonthaburi City-Pak Kret: 615 units sold, valued at 1,233 million baht, with an absorption rate of 3.1% per month.

4. Phra Khanong-Bang Na-Suan Luang-Pravet: 588 units sold, valued at 1,731 million baht, with an absorption rate of 2.2% per month.

5. Thonburi-Khlong San-Bangkok Noi-Bangkok Yai-Bang Phlat: 426 units sold, valued at 1,454 million baht, with an absorption rate of 1.6% per month.

Additionally, areas with high remaining condominium units that should be monitored due to high inventory, despite some areas having good sales and absorption rates, include:

(1) Huai Khwang-Chatuchak-Din Daeng: 11,086 units remaining, valued at 46,350 million baht, with an absorption rate of 2.0% per month.

(2) Thonburi-Khlong San-Bangkok Noi-Bangkok Yai-Bang Phlat: 8,526 units remaining, valued at 26,251 million baht, with an absorption rate of 1.6% per month.

(3) Phra Khanong-Bang Na-Suan Luang-Pravet: 8,390 units remaining, valued at 24,378 million baht, with an absorption rate of 2.2%.

(4) Nonthaburi City-Pak Kret: 5,922 units remaining, valued at 13,676 million baht, with an absorption rate of 3.1%.

(5) Sukhumvit: 4,856 units remaining, valued at 42,291 million baht, with an absorption rate of 1.7% per month.

When considering the price levels, it is found that the condominiums with the highest remaining units are in the price range of 2.01-3.00 million baht, with a total of 26,507 units remaining, valued at 72,703 million baht. The second highest is in the price range of 3.01-5.00 million baht, with 15,431 units remaining, valued at 60,400 million baht, and the third highest is in the price range of 1.51-2.00 million baht, with 10,063 units remaining, valued at 19,859 million baht.

Overall, it is observed that in Q2 2023, the housing market continues to decline in sales compared to Q1 2023, with a sales rate decrease of 32.3% compared to 2022. The absorption rate has adjusted to 2.6, down from 3.9 in Q2 2022, with the condominium segment experiencing the most significant decline, with a sales decrease of 56.5% and an absorption rate dropping to 2.5, compared to 5.6 in the previous year.

The Real Estate Information Center has projected the overall situation for 2023 and trends for 2024, estimating that in 2023, there will be a total of 95,732 residential units entering the market, divided into 56,646 single-family home projects and 39,086 condominium projects, with a growth rate decrease of 12.5%. It is expected that there will be a total of 80,239 new sales entering the market, including 47,375 single-family home projects and 32,864 condominium projects, down 15.6% compared to 2022, with a total of 198,282 units remaining in the market, an increase of 7.5%, indicating a better trend than in 2022, divided into 127,043 single-family home projects and 71,239 condominium projects. The average absorption rate is expected to decrease to 2.8 in 2023.

For 2024, the Real Estate Information Center predicts that the housing market will recover due to adjustments by operators in balancing remaining inventory and new products. It is expected that there will be a total of 108,886 new residential units launched, an increase of 13.7% compared to 2023, divided into 63,794 single-family home projects and 45,091 condominium projects. It is also expected that there will be a total of 109,184 new sales in 2024, an increase of 36.1%, divided into 62,862 single-family home projects and 46,323 condominium projects. The overall absorption rate is expected to increase from 2.8 in 2023 to 3.0 in 2024, with a total of 197,984 units remaining in 2024, divided into 127,976 single-family home projects and 70,008 condominium projects.

Regarding the opinions of property developers in a panel discussion on investment opportunities amidst negative factors, many parties believe that Thailand should have policies to encourage foreign nationals from the middle to high-income groups to reside in Thailand more, through purchasing properties priced between 3-5 million baht, granting residence visas for 3-5 years based on the price level.

Mr. Pirapong Jaroonaek, CEO of Origin Property Public Company Limited, stated that the real estate sector has not been performing well in the first half of this year, with a slow recovery. However, after the new government is fully appointed, there is hope for improvement as Thailand is looking for economic stimulus measures, which are expected to emerge in Q4.

As for the digital currency to be given to citizens, amounting to 10,000 baht each, it is viewed that if the funds are to stimulate the economy effectively, they must be utilized strategically, such as through domestic tourism, restaurants, or creating domestic tour packages worth more than the actual amount spent, to stimulate the demand for domestic travel among Thais, while excluding purchases of imported goods like iPads, iPhones, or other imports. If this can be achieved, it would maximize the value of the borrowed funds amounting to 500 billion baht.

The real estate sector hopes the government will extend the LTV relaxation policy for another two years to support those who have the purchasing power and wish to buy second or third homes, allowing families to reside or invest without needing to make high down payments, as high down payments are a barrier preventing people from deciding to purchase additional properties.

For foreign customers, it is anticipated that the second half of this year will be the high season for tourism. Therefore, increasing the GDP through supporting tourists to become residents, continuing from the previous government's long-term visa policy, but this time, it is requested to cover middle to high-income individuals to support the purchase of condominiums priced between 3-5 million baht, allowing them to reside in Thailand for up to 5 years. This group of foreign customers will be a new segment that will help boost the Thai real estate market through both property purchases and daily spending, which is expected to be around 30,000-40,000 baht per person per month.

Mr. Somboon Wasinchachawan, Acting CEO of Fraser Property Home (Thailand), stated that after the country reopened, foreign customers, especially Indians, have been traveling to Thailand more, with hotel occupancy rates exceeding 80-90%. This positively impacts employees and workers in the hotel and tourism business, who receive increased service charges, leading to higher incomes and purchasing power. If combined with digital currency, it will help stimulate demand for properties in the middle to lower price range of 3-5 million baht, which is expected to recover from the end of this year until 2024. Fraser plans to expand its portfolio to cover all segments by adding new projects in interesting locations.

Mr. Terdsak Thaveethiratham, Deputy Managing Director of Research at Asia Plus Securities, stated that the Thai economy has passed its lowest point, with many agencies predicting an average GDP of 3.3%, which may grow up to 3.8% for the entire year, especially in the second half, which is the tourism high season, bringing in more funds from tourists into the system. As for government measures expected to be announced soon, such as reducing fuel and electricity costs, these will help ease expenses for citizens. The government's plan to distribute 10,000 baht in digital currency is supported, as it will help stimulate purchasing power for another six months. From an academic perspective, it is believed that participation from all sectors will lead to broader distribution, with expectations that the money will circulate in the system approximately 1.5 times.