The Home Builder Association (HBA) <\/span><\/strong><\/span>has analyzed <\/span><\/strong><\/span>the signals in the home building market for 2025, valued at 10 billion baht, which continues to face ongoing challenges, reflected through '3 Opportunities' and '3 Key Issues to Watch'. <\/span><\/strong><\/span>The overall economic situation, labor costs, and high competition suggest that businesses need to adapt quickly, employing strategies to navigate intense competition and explore new markets in rural areas, while also responding more to trends in technology and the environment, preparing for the day the market recovers. <\/span><\/strong><\/span>

Mr. Olar Chanphu, President of the Home Builder Association (HBA) <\/span><\/strong><\/span>, revealed that the overall market situation for home building in 2025 shows signs of improvement due to supportive factors such as lower interest rates, increased consumer confidence in the economy from government policies, and a recovering tourism situation, leading to more individuals deciding to build new homes. <\/span><\/span>

In contrast, the home building market in 2024 was filled with challenges from economic factors, including <\/span>interest rates, strict lending policies from financial institutions, and high living costs due to rising product prices, which affected consumer income. This particularly impacted those planning to build homes, causing delays in decision-making. It is estimated that the total value of contracts signed for home building by member companies of the association by the end of this year will be around 11 billion baht, down from the initial target of 12 billion baht set at the beginning of 2024. <\/span><\/span>

Exploring '3 Opportunities' in the Home Building Market <\/strong>

Mr. Olar continued that although the overall market is still awaiting a recovery in purchasing power, the segments for homes priced between 5 to 10 million baht and those at 20 million baht have gained more interest from potential home builders, as evidenced by the orders placed during the recent Home Building and Material Expo 2024 held in September 2024. <\/span><\/span>

Additionally, the declining interest rates are influencing home building decisions, along with an increased focus on marketing and receiving home building orders in rural areas, which was previously dominated by companies focusing on the Bangkok and surrounding areas. This presents new opportunities for 2025. <\/span><\/span>

'3 Key Issues to Watch' <\/strong>

The challenges posed by the still-recovering economy remain a close watch for the association, including issues like unemployment, inflation, and rising household debt. Particularly, middle to lower-income buyers may face debt management issues, leading to cancellations or delays in home building. Meanwhile, competition in the home building market is expected to intensify in 2025, both from other home building companies and from high-rise construction contractors, such as condominium projects that are increasingly taking on home building contracts. "We have observed that high-rise contractors are adapting by taking on residential construction projects at prices lower than the market rate, raising concerns about price competition that may affect the quality of completed homes," Mr. Olar stated. Additionally, factors to watch include rising labor costs and a shortage of workers, as well as the increasing costs of construction materials, which could lead to delays in consumer decisions to build homes. <\/span><\/span>

Preparing for the Market Recovery <\/span><\/strong><\/span>

Mr. Olar expressed hope to see positive signals in 2025, particularly from the second quarter onward, due to government economic stimulus measures and positive responses from incentives for tax deductions on home building. For those looking to build homes valued at 1 million baht, they can deduct up to 10,000 baht, with a maximum of 100,000 baht (for homes not exceeding 10 million baht), provided that the contract is signed and construction begins between April 9, 2024, and December 31, 2025. Furthermore, home building companies are adjusting their strategies to meet the demand for new home concepts, including smart home systems, environmentally friendly homes (Green Homes), and energy-efficient homes. <\/span><\/span>

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