The Home Builder Association (HBA) <\/span><\/strong><\/span> has revealed that the total value of home construction contracts in Q4 of 2023 has decreased by approximately 10% compared to the same period in 2022. Looking ahead to 2025, three key factors are emerging: a clear recovery in consumer confidence, continuous growth in demand for luxury homes, but signs of intense price competition as contractors vie for purchasing power. It is suggested to control costs while maintaining quality, with an estimated total home construction orders expected to reach 11 billion baht by the end of this year.<\/span><\/strong><\/span><\/p>

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Mr. Olar Chanphu, President of the Home Builder Association (HBA)<\/span><\/strong><\/span>, stated that the overall home construction market in Q4 of 2023 shows a relatively positive trend compared to Q3. This improvement is attributed to consumer confidence in the government and its economic stimulus policies, including the 10,000 baht cash handout to targeted groups and tourism promotion campaigns. As a result, consumers who had previously postponed their home construction plans are now returning to make decisions, particularly in the 5-10 million baht price range, followed by homes priced at 20 million baht, as clearly reflected in the recent Home Building and Materials Expo 2024.<\/span><\/strong><\/span><\/p>

Additionally, in the final stretch of the year, the home construction market is benefiting from tax incentives for those looking to build homes valued at 1 million baht, which can be deducted from taxes up to 10,000 baht, not exceeding 100,000 baht (for homes priced under 10 million baht). This applies to homes for which contracts are signed and construction begins between April 9, 2024, and December 31, 2025.<\/span><\/span><\/p>

“Overall, Q4 shows a significant improvement compared to Q3 of this year. The main reason is likely due to the Home Building and Materials Expo 2024, which stimulated decision-making through attractive promotions. However, the returning purchasing power is still about 10% lower than in Q4 of 2022, due to the country's economic conditions affecting consumer confidence. It is expected that the total value of home construction contracts from member companies of the association will be around 11 billion baht by the end of this year.”<\/strong><\/span><\/span>
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Regarding the outlook for the home construction market in 2025, the overall signals are improving due to supportive factors such as lower interest rates and growing consumer confidence in government policies, with good news expected from the repair and construction projects soon. Additionally, the demand for luxury homes continues to grow in Bangkok, surrounding areas, and provinces, along with external factors like the upcoming U.S. presidential election, which is anticipated to clarify various policies that may impact Thailand's overall economy.<\/span><\/span><\/p>

Mr. Olar noted that a key point to watch in 2025 is the expected increase in price competition among contractors in the real estate sector who are turning to home construction as a means of survival in the current economic climate. Many are focusing on offering construction services at lower prices than the market rate, raising concerns about competition, quality, and construction standards delivered to consumers.<\/span><\/span><\/p>

“Building homes at lower prices may affect the quality of work. Additionally, if individuals who are not registered for tax take on contracts, they may create agreements that do not meet standards, impacting the overall home construction business. The association is preparing its members to handle the competition by focusing on efficient cost management to maintain high-quality and standard work,” Mr. Olar stated.<\/span><\/span><\/p>