Overview of the Real Estate Market in Q2 2024 continues to slow down, showing less negative growth and signs of improvement. This is attributed to economic stimulus measures through the real estate sector and financial institutions beginning to increase lending. The new home market is slowing down more than the secondary home market, particularly with second-hand condos performing well. Overall, the first half of 2024 has slowed more than during the COVID-19 period, with hopes that the second half of the year will result in a less than 5% decline for the entire year.

The Real Estate Information Center (REIC) of the Government Housing Bank announced key economic indicators for the housing market in Q2 2024. Dr. Wichai Wiratthakhan, the bank inspector and acting director of the REIC, commented on the housing market situation: "REIC continues to observe a slowdown in demand in Q2 2024, but there is a noticeable improvement compared to the first quarter. Although the growth in the number of units and the value of property transfers nationwide, as well as the amount of new personal housing loans in Q2 2024, remains negative compared to the same period last year, the decline is less severe. There is significant growth compared to Q1 2024, likely due to government economic stimulus measures in the real estate sector that began on April 9, 2024."

In Q2 2024, the total number of housing property transfers nationwide was 86,998 units, valued at 243,404 million baht. The number of units decreased by -4.5% and the value decreased by -5.7%, likely due to financial institutions maintaining strict lending policies. The total value of new personal housing loans nationwide was 144,115 million baht, down -10.1% compared to Q2 2023. However, the demand slowdown this quarter showed a smaller decline than in Q1 2024, which had previously seen declines of -13.8%, -13.4%, and -20.5% respectively.

When considering growth compared to the previous quarter (QoQ), the number of units and the value of housing property transfers grew by 19.3% and 16.6% respectively, while the amount of new personal housing loans grew by 18.6%.

• Single-family homes are slowing down, while condos are expanding, and the secondary home market is slowing less than new homes.

The property transfer situation by type of residence nationwide in Q2 2024 shows that single-family homes decreased by -9.9%, with 58,567 units, and the overall value of single-family homes decreased by -6.4%, valued at 172,889 million baht. The price segments that saw less decline include homes priced below 2 million baht, those priced between 5.01-7.50 million baht, and single-family homes priced above 10 million baht, which all saw increases in both the number of units and value by 3.2% and 12.4% respectively compared to the same period in 2023.

When comparing the transfer units of new and second-hand single-family homes, second-hand homes showed a slowdown in both units and value, decreasing by -7.0% and -7.1%. Meanwhile, new single-family homes slowed down by -16.2% and -5.7% respectively. The price segments of new single-family homes that saw less decline include those priced between 1.01-2.00 million baht and 5.01-10.00 million baht, with new single-family homes priced above 10 million baht seeing an increase of 10.1%.

In contrast, the number of condo transfers increased by 8.9%, with 28,431 units, while the value decreased by -3.9%, valued at 70,515 million baht. The price segment that showed positive growth was condos priced below 5 million baht.

• Housing supply is pressured by declining demand, and new projects are slowing development.

The ongoing strong slowdown in housing demand has clearly pressured housing supply. In Q2 2024, there were 18,679 new land allocation permits issued nationwide, a decrease of -16.8%.

Additionally, the number of new housing units has also decreased, particularly in the Bangkok metropolitan area, which saw 16,442 units, down -27.3%, with a value of 184,790 million baht, an increase of 43.8% compared to Q2 2023. The decrease in new units but significant increase in value is due to developers adjusting their business strategies to produce higher-priced housing to meet the demand of high-income buyers.

Regarding the supply of land allocation permits nationwide, from the total of 18,679 permits issued, the area with the most significant growth was the northern region, which saw an increase of 212.7%. In the Bangkok metropolitan area, land allocation permits increased by 3.6%. When considering the cumulative land allocation permits for the first half of 2024, the northern region still holds the highest proportion, with 3,036 units, an increase of 122.3%.

The top category is townhouses, with 7,830 units or 41.9%, a decrease of -0.2% compared to the same period last year.

The second category is single-family homes, with 7,361 units or 39.4%, a decrease of -14.1% compared to the same period last year.

The third category is duplex homes, with 3,050 units or 16.3%, a decrease of -30.2% compared to the same period last year.

The cumulative land allocation permits nationwide for the first half of 2024, categorized by type of home, show that the top category is single-family homes, with 14,585 units or 39.9%, a decrease of -0.1% compared to the same period last year.

The second category is townhouses, with 14,401 units or 39.4%, a decrease of -14.9% compared to the same period last year.

The third category is duplex homes, with 6,573 units or 18.0%, a decrease of -25.0% compared to the same period last year.

Additionally, the total area of construction permits nationwide in Q2 2024 was 7,814,783 square meters, a decrease of -19.0%. The area for single-family homes was 7,180,340 square meters, down -19.3%, and for condos, it was 634,443 square meters, down -16.2%. This marks the lowest level of residential construction permits issued in 26 quarters.

Overall, in the first five months of 2024, the total area of construction permits nationwide was 14,472,642 square meters, a decrease of -13.7% compared to the first five months of 2023 (Jan-May 2023), which had a total construction area of 16,776,159 square meters. The area for single-family homes decreased by -12.1%, and the area for condo construction decreased by -33.1%.

• The overall situation in the first half of 2024 has slowed more than during the COVID-19 period, with hopes that the second half will result in a less than 5% decline for the entire year.

The overall demand in the first half of 2024 has seen a stronger slowdown than in previous years, even during the COVID-19 period in 2020-2021. In the first half of 2024, there were only 159,952 units and a value of 452,136 million baht in property transfers, down -9.0% and -9.4% respectively. The amount of new personal housing loans was only 265,644 million baht, down -15.2% compared to the first half of 2023.

The cumulative number of property transfers in the first two quarters or the first half of 2024 for new homes decreased by -12.4%, and for second-hand homes, it decreased by -6.9%. Notably, the transfer of single-family homes decreased by -14.2%, while condos overall increased by 4.4%. This increase was driven by second-hand condos, which rose by 11.8%, while new condos decreased by -1.5%, particularly in the price segment above 10 million baht, which saw the largest decline of -33.5%. New condos saw an increase in transfers in the price segments of 2.01-3.00 million baht, with the highest increase of 15.8%, followed by 1.51-2.00 million baht at 14.2% and 1.01-1.50 million baht at 4.6%.

Moreover, REIC found that the overall sales of new housing in 27 provinces in the first half of 2024 also slowed down, reflecting the weak purchasing power of potential homebuyers due to the economic slowdown and household debt burdens. When faced with credit rejections from financial institutions, homebuyers have become hesitant to purchase and borrow, leading some to delay their home purchases. Investors in housing have also slowed their investments, preferring not to use personal funds to cover about 20% of the housing price according to LTV criteria, and instead opting to invest in other assets with better returns.

Nevertheless, REIC has adjusted its forecast for the housing market in 2024 based on actual data from the first half of the year, including GDP growth rates, average MRR interest rates from six banks, general inflation rates, absorption rates, and the impact of government economic stimulus measures through the real estate sector.

On April 9, 2024, REIC projected that the housing market in 2024 would see a decline in both demand and supply, with an estimated 350,545 housing property transfers, a decrease of -4.4%, and a growth range between -14.0% and 5.1%. It is expected that there will be approximately 243,088 single-family housing property transfers, down -6.0%, with a growth range between -15.4% and 3.3%. The number of condo property transfers is expected to be around 107,456 units, down -0.6%, with a growth range between -10.5% and 9.4%.

The value of housing property transfers is projected to be approximately 1,012,760 million baht, a decrease of -3.3%, with a growth range between -12.9% and 6.4%. This includes an estimated value of single-family housing property transfers of about 717,052 million baht, down -3.4%, with a growth range between -13.1% and 6.3%, and condo property transfers valued at approximately 295,707 million baht, down -2.9%, with a growth range between -12.6% and 6.8%.

It is also projected that in 2024, the total value of new personal housing loans nationwide will be 651,317 million baht, down -4.0%, with a growth range between -11.7% and 5.6%.

Regarding supply, it is expected that in 2024, there will be 89,420 land allocation permits issued nationwide, a decrease of -6.4%, with a growth range between -15.8% and 3.0%. It is also anticipated that the total area of construction permits nationwide will be approximately 36,102,795 square meters, down -8.9%, with a growth range between -18.0% and 2.5%. The area for single-family housing construction permits is expected to be about 32,816,529 square meters, down -9.5%, with a growth range between -18.5% and 1.4%, and the area for condo construction permits is expected to be around 3,286,266 square meters, down -3.0%, with a growth range between -12.7% and 8.7%.

  • Foreigners buying condos: Chinese remain the top buyers, overall showing signs of slowdown.

Additionally, REIC has been monitoring the situation of foreign condo ownership transfers in Q2 2024, finding that the number of foreign condo ownership transfers in Q2 2024 was 3,342 units, accounting for 11.8% of total condo ownership transfers, while the value accounted for 21.1% or 14,874 million baht. Overall, in Q2 2024, the number and value of foreign housing ownership transfers decreased by -6.2% and -17.7% respectively compared to the same period last year. Notably, there were significant declines in ownership transfers from buyers of Chinese, Russian, and Myanmar nationality in Q2 2024.

In the first half of the year, there were 7,280 units of foreign condo ownership transfers, accounting for 13.6% of total condo ownership transfers, with a value of 24.6% or 32,888 million baht. Chinese buyers maintained the highest proportion of condo ownership transfers, with 2,872 units valued at 13,203 million baht. The second highest was from Myanmar nationality with 638 units valued at 3,240 million baht. The third was from Russian nationality with 567 units valued at 1,874 million baht. The fourth was from Taiwanese nationality with 326 units valued at 1,592 million baht, and the fifth was from American nationality with 292 units valued at 1,580 million baht.