"Real Estate Information Center" predicts that in 2021, the housing market situation in the three EEC provinces regarding land allocation license requests will experience a growth rate between -31.3% to -16.0%. The requests for residential construction licenses are expected to grow between -9.1% to 11.2%.

On the demand side, it is anticipated that the number of residential ownership transfers will grow between -30.3% to -14.8%, while the value of residential ownership transfers is expected to grow between -18.3% to -0.1%, due to the increase in housing prices per unit compared to 2020.

 

Dr. Vichai Wiratkhapan, Inspector of the Government Housing Bank and Acting Director of the Real Estate Information Center stated that the housing market situation in the EEC provinces, which are classified as high-risk areas (dark red), has been continuously slowing down until the third quarter of 2021.

Regarding the supply of land allocation licenses, it has been found to be the lowest in 9 years, or in 34 quarters since the second quarter of 2013, and the issuance of residential construction licenses in the third quarter of 2021 remains below the 5-year average. However, there is a slight improvement as the issuance of construction licenses increased by 13.3% compared to the previous quarter. On the other hand, the number of residential ownership transfers has decreased continuously for the tenth consecutive quarter since the second quarter of 2019, when the Bank of Thailand's LTV measures were first implemented.

"Overall, the Thai economic situation in the first nine months of 2021 (January - September) showed a negative growth rate of -2.6% in the first quarter, while the second quarter saw a growth of 7.6%. However, this growth was from an abnormally low economic condition during the same period last year. The third quarter, however, returned to a negative growth of -0.3%."

         As a result, both the supply and demand of the housing market in the first nine months of 2021 (January - September) have clearly contracted. The supply of land allocation licenses decreased in both the number of projects and units by -31.3% and -34.6%, respectively. However, the issuance of residential construction licenses increased by 9.1%, noting that this increase came from a low base during the same period in 2020. On the demand side, the transfer of residential ownership decreased in both the number of units and value by -18.3% and -16.3%, respectively.

         However, there are positive factors such as the very low market interest rates, and the government has extended measures to stimulate the real estate sector by reducing transfer fees and mortgage fees for new residential properties priced below 3 million baht until the end of 2021, and reducing land and building tax rates to 10%. These measures will help alleviate the burden on buyers and real estate developers.

            The Bank of Thailand has also announced a temporary relaxation of LTV measures for loan contracts made from October 20, 2021, to December 31, 2022, to help support the Thai economy affected by the prolonged COVID-19 pandemic, which has lasted nearly two years. This has contributed to the residential ownership transfer figures in the EEC provinces not declining as severely as initially anticipated at the beginning of the year.

            The government has also announced a policy to open the country in early December 2021, with Chonburi and Rayong being pilot areas for tourism. The National Economic and Social Development Council predicts that the Thai economy in 2021 will grow by 1.2%, gradually improving from a decline of -6.1% in 2020.

           The Real Estate Information Center predicts that in 2021, the housing market situation in the three EEC provinces regarding land allocation license requests will experience a growth rate between -31.3% to -16.0%. The requests for residential construction licenses are expected to grow between -9.1% to 11.2%.

On the demand side in 2021, it is predicted that the number of residential ownership transfers will grow between -30.3% to -14.8%, while the value of residential ownership transfers is expected to grow between -18.3% to -0.1%, due to the increase in housing prices per unit compared to 2020.

 

For the housing market situation in the three EEC provinces in the third quarter of 2021 and the first nine months of 2021 (January - September) is as follows:

1. Housing Supply Situation

1.1 Land Allocation License Issuance

In the third quarter of 2021, there were 28 residential projects that received land allocation licenses from the Land Department, totaling 2,575 units. The number of projects decreased by -46.2%, and the number of units decreased by -59.5% compared to the same period in 2020, which had 52 projects and 6,358 units. It can be seen that in this quarter, both the number of projects and units remain below the average of the 5 years before the COVID-19 pandemic by -44.0% and -54.8%, respectively.

Comparing with historical data, the third quarter of 2021 had the lowest number of units receiving land allocation licenses in the EEC provinces in 9 years, or in 34 quarters since the second quarter of 2013, which had 4,043 units (see Charts 1 and 2).

For the first nine months of 2021 (January – September), there were 99 residential projects that received land allocation licenses from the Land Department, totaling 9,665 units. This represents a decrease in both the number of projects and units by -31.3% and -34.6%, respectively, compared to the same period in 2020, which had 144 projects and 14,767 units (Chart 3).

Out of the 9,665 units, the majority were townhouses, with 4,872 units, accounting for 50.4% of the total land allocation licenses issued, but this represents a decrease of -37.4%. Following that were single-family homes with 2,425 units, accounting for 25.1%, down by -37.3%, and duplex homes with 2,234 units, accounting for 23.1%, down by -22.8%. The remainder consists of commercial buildings and allocated land, respectively (see Chart 3).

 

1.2 Residential Construction License Issuance

            In the third quarter of 2021, there were approximately 8,362 residential construction licenses issued in the three EEC provinces, including self-built houses, houses in allocated projects, and condominiums, representing an increase of 13.3% compared to the same period in 2020. However, the issuance of residential construction licenses in the third quarter of 2021 remains below the average of the 5 years before the COVID-19 pandemic by -21.7%. This includes approximately 6,374 licenses for horizontal residences and approximately 1,988 licenses for condominiums, with horizontal residences seeing a decrease of -5.8%, while condominiums saw an increase of 223.7% compared to the same period in 2020 (see Charts 4 and 5).

For the first nine months of 2021 (January - September), there were approximately 25,411 residential construction licenses issued in the three EEC provinces, including self-built houses, houses in allocated projects, and condominiums, representing an increase of 9.1% compared to the same period in 2020, divided as follows:

Residential construction licenses for horizontal residences totaled approximately 20,269 units

Condominiums totaled approximately 5,142 units

The horizontal residences saw a decrease of -3.1% compared to the same period in 2020, while condominiums saw a significant increase of 116.3%, but this increase came from a low base during the same period in 2020 (see Table 1).

2. Housing Demand Situation

                  2.1 Residential Ownership Transfers

                  In the third quarter of 2021, there were 10,087 residential ownership transfers in the three EEC provinces, valued at 23,372 million baht. The number of units decreased by -13.8%, marking the tenth consecutive quarter of decline since the second quarter of 2019, when the Bank of Thailand's LTV measures were introduced in April 2019, continuing into 2020 and through the third quarter of 2021, affected by four waves of COVID-19 outbreaks. The value decreased by -13.1%, marking the fourth consecutive quarter of decline compared to the same period in 2020, which had 11,698 units and a value of 26,907 million baht.

 

                  In the third quarter of 2021, the majority of residential ownership transfers were for horizontal residences, totaling 7,920 units, accounting for 78.5% of all ownership transfers, a decrease of -12.5%. The value decreased by -10.9%, amounting to 18,404 million baht, compared to the same period in 2020, which had 9,052 units and a value of 20,644 million baht. The condominiums accounted for 2,167 units, representing 21.5%, a decrease of -18.1%, with a value decrease of -20.7%, amounting to 4,968 million baht, compared to the same period in 2020, which had 2,646 units and a value of 6,263 million baht (see Charts 6 and 7).

 

                  For new residential ownership transfers (or ownership transferred from legal entities), there were 5,335 units, while second-hand residential ownership transfers (transferred from individuals) totaled 4,752 units, resulting in a ratio of new residential ownership transfers to second-hand ownership transfers in the third quarter of 2021 of 53:47. The value of new ownership transfers amounted to 13,486 million baht, while the value of second-hand ownership transfers was 9,886 million baht, resulting in a value ratio of new residential ownership to second-hand residential ownership of 58:42.

 

For the first nine months of 2021 (January - September), there were 26,339 residential ownership transfers in the three EEC provinces, valued at 61,195 million baht. The number of units and value decreased by -18.3% and -16.3%, respectively, compared to the same period in 2020, which had 32,248 units and a value of 73,115 million baht.

                  Among these, the majority of residential ownership transfers were for horizontal residences, totaling 19,203 units, accounting for 72.9% of all ownership transfers, a decrease of -22.4%, with a value decrease of -18.2%, amounting to 45,531 million baht, compared to the same period in 2020, which had 24,750 units and a value of 55,630 million baht. The condominiums accounted for 7,136 units, representing 27.1%, with a value of 15,664 million baht, showing decreases in both the number of units and value by -4.8% and -10.4%, respectively, compared to the same period in 2020, which had 7,498 units and a value of 17,485 million baht (see Table 2).

                  Additionally, it was found that the ownership transfers were divided into new residential ownership transfers (or ownership transferred from legal entities) totaling 14,032 units, and second-hand residential ownership transfers (transferred from individuals) totaling 12,307 units, resulting in a ratio of new residential ownership transfers to second-hand ownership transfers in the first nine months of 2021 of 53:47.

                 Meanwhile, the value of new residential ownership transfers amounted to 35,602 million baht, and the value of second-hand ownership transfers was 25,593 million baht, resulting in a value ratio of new residential ownership to second-hand residential ownership of 58:42.

 

 

For horizontal ownership transfers in the first nine months of 2021 (January - September) in the three EEC provinces, in terms of the number of units, it was found that the ownership transfers for new homes (or new homes transferred from legal entities) totaled 9,119 units, valued at 24,291 million baht, while the ownership transfers for second-hand homes (second-hand homes transferred from individuals) totaled 10,084 units, valued at 21,240 million baht. This results in a ratio of new residential ownership transfers to second-hand ownership transfers in the first nine months of 2021 (January - September) of 47:53, while the value of new ownership transfers to second-hand ownership transfers has a ratio of 53:47.

                  In this number of units, when classified by price level, it was found that the majority were ownership transfers in the price range of 2.01 – 3.00 million baht, totaling 7,027 units, accounting for 36.6% of all horizontal ownership transfers, divided into new ownership transfers of 3,992 units and second-hand ownership transfers of 3,035 units. Following that was the price range of 1.51 – 2.00 million baht, totaling 4,581 units, accounting for 23.9%, divided into new ownership transfers of 2,203 units and second-hand ownership transfers of 2,378 units. The price range of 3.01 – 5.00 million baht totaled 2,649 units, accounting for 13.8%, divided into new ownership transfers of 1,740 units and second-hand ownership transfers of 909 units, respectively.

                  When considering the value of ownership transfers, it was found that the majority were ownership transfers in the price range of 2.01 – 3.00 million baht, totaling 17,407 million baht, accounting for 38.2% of all horizontal ownership transfer values, divided into new ownership transfers of 9,873 million baht and second-hand ownership transfers of 7,533 million baht. Following that was the price range of 3.01 – 5.00 million baht, totaling 10,067 million baht, accounting for 22.1%.

This is divided into new ownership transfers of 6,641 million baht and second-hand ownership transfers of 3,427 million baht, and the price range of 1.51 – 2.00 million baht totaled 8,174 million baht, accounting for 18.0%, divided into new ownership transfers of 3,930 million baht and second-hand ownership transfers of 4,244 million baht, respectively (see Charts 8 and 9).

 

 

For condominium ownership transfers in the first nine months of 2021 in the three EEC provinces, in terms of the number of units, it was found that the ownership transfers for new condominiums totaled 4,913 units, valued at 11,311 million baht, while the ownership transfers for second-hand condominiums totaled 2,223 units, valued at 4,353 million baht. This results in a ratio of new condominium ownership transfers to second-hand condominium ownership transfers in the first nine months of 2021 (January - September) of 69:31, while the value of new condominium ownership transfers to second-hand condominium ownership transfers has a ratio of 72:28.

              In this number of units, when classified by price level, it was found that the majority were ownership transfers in the price range of 1.51 – 2.00 million baht, totaling 2,228 units, accounting for 31.2% of all condominium ownership transfers, divided into new ownership transfers of 1,860 units and second-hand ownership transfers of 368 units. Following that was the price range of 2.01 – 3.00 million baht, totaling 1,490 units, accounting for 20.9%, divided into new ownership transfers of 1,095 units and second-hand ownership transfers of 395 units. The price range of up to 1.01 – 1.50 million baht totaled 1,318 units, accounting for 18.5%, divided into new ownership transfers of 770 units and second-hand ownership transfers of 548 units, respectively.

                  When considering the value of ownership transfers, it was found that the majority were ownership transfers in the price range of 1.51 – 2.00 million baht, totaling 3,805 million baht, accounting for 24.3% of all condominium ownership transfer values, divided into new ownership transfers of 3,172 million baht and second-hand ownership transfers of 633 million baht. Following that was the price range of 2.01 – 3.00 million baht, totaling 3,655 million baht, accounting for 23.3%, divided into new ownership transfers of 2,695 million baht and second-hand ownership transfers of 959 million baht, and the price range of 3.01 – 5.00 million baht, totaling 2,588 million baht, accounting for 16.5%, divided into new ownership transfers of 2,045 million baht and second-hand ownership transfers of 543 million baht, respectively (see Charts 10 and 11).

 

Thank you for the information from: Real Estate Information Center