Dr. Vichai Wiratthakhan, Banking Inspector and Acting Director of the Real Estate Information Center stated that the real estate market direction for 2024 shows signs of recovery, but remains weak overall. In 2023, the total sales units across 27 provinces reached 307,778 units, valued at 1.56 trillion baht, while new sales for 2023 were approximately 120,547 units, down 16.3%, equating to a value of 557,307 million baht, a decrease of 14.2%.

Particularly, products in the 3 million baht price range are expected to stabilize in a downward trend due to the cost of living issues affecting purchasing power and loan applications, with financial institutions applying stricter credit assessment criteria, leading to high loan rejection rates for mid to low-priced housing.

For properties priced at 10 million baht and above, although sales continued in 2023, with condominiums selling around 200 units per quarter and single-family homes 1,200 units per quarter, the sales volume is still considered low compared to the second half of 2022. New supply continues to enter the market, with recent data showing about 4,000 unsold condominiums priced at 10 million baht and above, and over 13,630 unsold single-family homes. Currently, the number of unsold units is more than ten times the sales volume per quarter, indicating a significant surplus, and it is expected to take about 10 quarters to clear the stock without new products entering the market.

If the market can maintain this momentum under a GDP growth of 2.8 - 3.2%, general inflation of 1.0 - 2.0%, and an average MRR interest rate for the year between 6.8 – 7%, along with existing real estate stimulus measures, it is expected that the number of units and the value of property transfers in 2024 will be approximately 373,360 units, an increase of 1.8% (Base Case).

The number of transfers for single-family homes is expected to be around 270,219 units, growing by 4.4%, while the number of transfers for condominiums is expected to be approximately 103,141 units, decreasing by 4.6%.

The value of property transfers is expected to increase by 3.9%, amounting to approximately 1,087,499 million baht, divided into:

  • Single-family homes approximately 786,142 million baht, an increase of 5.9%
  • Condominiums approximately 301,357 million baht, a decrease of 1.0%

For nationwide land allocation permits, it is expected to reach 95,897 units, an increase of 2.6%. The total area for construction permits nationwide is expected to be approximately 40,080,060 square meters, an increase of 3.5%, with single-family home construction permits at approximately 35,925,126 square meters, an increase of 1.2%, and condominium construction permits at approximately 4,154,934 square meters, an increase of 28.3%.

For new project launches specifically in the Bangkok and surrounding areas, it is projected that there will be 103,019 new residential units available for sale, an increase of 6.4%, with a project value of 609,992 million baht, an increase of 2.1%.

Regarding the Housing Purchase Confidence Index in Bangkok and Surrounding Areas for Q4 2023, it was found that in the first nine months of 2023, the index was at 41.2, indicating low confidence among potential homebuyers. In Q4 2023, the index rose slightly to 44.5 compared to Q3 2023 (QoQ) which was at 41.2, but still below the neutral level of 50.0.

"The decline in confidence may be due to the slowing economy from negative factors, particularly the policy interest rate remaining at 2.5% and potentially stabilizing, along with the Bank of Thailand not having policies to relax LTV measures, while household debt exceeding 90% of GDP remains a significant issue for housing affordability."

Data shows that most potential buyers are aged between 25-34 years, predominantly from Gen Y and Gen Z, making up 46.1%. Over 59.7% are employed in the private sector, and 34.6% have an average monthly income between 15,001 – 30,000 baht. The preferred price range for housing is as follows: the top choice is 2.01 – 3.00 million baht, accounting for 29.7%, followed by 3.01 – 5.00 million baht at 26.1%, and 1.51 – 2.00 million baht at 15.5%.

In terms of housing type, over 41.8% prefer to buy single-family homes in the 3.01 - 5.00 million baht range, followed by condominiums at 34.1% in the 2.01 - 3.00 million baht range. Townhouses have a purchase interest of 16.5%, primarily in the 2.01 - 3.00 million baht range, while duplexes have a purchase interest of 7.6% in the 5.01 - 7.50 million baht range.

Those interested in purchasing duplexes show a preference for higher price ranges compared to other types, as most desired locations are in Bangkok, where land prices are higher than in other provinces. In Q3 2023, the demand for single-family homes was 47.3%, while the demand for condominiums, townhouses, and duplexes was 36.5%, 13.5%, and 2.7%, respectively.

Overall, the housing market in 2024 may have opportunities for growth, but there are still several risks. Therefore, support from the government may be necessary to build confidence in home purchases and stimulate purchasing power among affluent customers, particularly through relaxing LTV criteria, which could significantly boost demand. For middle to lower-income buyers, the government should consider implementing Soft Loan measures to assist this group by providing loans that align with current selling prices to enhance purchasing power and strengthen demand in the real estate market.