"Design and Construction System Costs" have pushed the standard home construction price index for Q3 2023 up by 1.5% compared to the same period last year, with the index value reaching 134.2. The key factor contributing to this increase is the compensation in the design and construction system category, which rose by 3.6%, while the prices of steel and steel products decreased by 9.6% due to an oversupply of Chinese steel in the market stemming from the real estate crisis in China.

The Real Estate Information Center of the Government Housing Bank (REIC) reported that the standard home construction price index for Q3 2023 stands at 134.2, reflecting a 0.1% increase compared to Q2 2023 (QoQ) and a 1.5% increase compared to the same period last year (YoY). The factors leading to the price index increase stem from compensation in the design and construction system category, which saw the highest increase in architectural work at 3.6% compared to the same period last year. Meanwhile, structural engineering work decreased by 2.6% and plumbing system work decreased by 1.7% compared to the same period last year (YoY).

Dr. Vichai Wiratkhapan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center revealed that the categories of construction materials that saw price reductions include four items: steel and steel products, sanitary ware, concrete products, and electrical and plumbing equipment. Notably, the price of steel and steel products decreased the most, by approximately 9.6% compared to the same period last year (YoY), due to a decline in global market prices driven by supply and demand dynamics for steel, as there is an excess supply of steel from the real estate crisis in China, which has reduced domestic demand for steel. This has led to an increase in the stock of excess steel being offloaded to Thailand, alongside a decrease in diesel prices, which affects production costs and the prices of various construction materials, resulting in lower steel prices in Thailand. Meanwhile, the price index for tiles, wood and wood products, and other construction materials has increased due to rising costs from raw materials and operational expenses compared to the same period last year.

In terms of labor, there was an increase of 1.1% compared to the same period last year. When analyzing the costs of construction by category, it was found that:

1. Design and Construction System Work

Structural engineering work saw a compensation rate decrease of 2.6% compared to the same period last year (YoY) and a decrease of 0.9% compared to Q2 2023 (QoQ), accounting for 27.6% of the design and construction system category.

Architectural work experienced a compensation rate increase of 3.6% compared to the same period last year (YoY) and an increase of 0.6% compared to Q2 2023 (QoQ), making up 66.1% of the design and construction system category.

Plumbing system work saw a compensation rate decrease of 1.7% compared to the same period last year (YoY) but increased by 0.1% compared to Q2 2023 (QoQ), representing 2.7% of the design and construction system category.

Electrical and communication system work experienced a compensation rate decrease of 0.1% compared to the same period last year (YoY) and a decrease of 0.1% compared to Q2 2023 (QoQ), accounting for 3.6% of the design and construction system category (see Table 1).

2. Construction Materials account for 60.3% of the standard home construction costs, with the following changes:

Wood and wood products saw a price increase of 4.8% compared to the same period last year (YoY) and an increase of 1.5% compared to Q2 2023 (QoQ), representing 27.9% of the construction materials category.

Concrete products experienced a price decrease of 1.1% compared to the same period last year (YoY) and a decrease of 0.4% compared to Q2 2023 (QoQ), accounting for 7.1% of the construction materials category.

Steel and steel products saw a price decrease of 9.6% compared to the same period last year (YoY) and a decrease of 3.5% compared to Q2 2023 (QoQ), making up 8.9% of the construction materials category.

Tiles experienced a price increase of 16.6% compared to the same period last year (YoY) and an increase of 3.6% compared to Q2 2023 (QoQ), representing 5.8% of the construction materials category.

Sanitary ware saw a price decrease of 8.9% compared to the same period last year (YoY) and a decrease of 8.9% compared to Q2 2023 (QoQ), accounting for 3.0% of the construction materials category.

Electrical and plumbing equipment experienced a price decrease of 1.0% compared to the same period last year (YoY) and a decrease of 0.1% compared to Q2 2023 (QoQ), making up 6.1% of the construction materials category.

Other construction materials saw a price increase of 2.6% compared to the same period last year (YoY) but a decrease of 0.1% compared to Q2 2023 (QoQ), representing 41.2% of the construction materials category (see Table 2).

3. Labor accounts for 39.7% of the standard home construction costs, with labor costs increasing by 1.1% compared to the same period last year.