The Real Estate Information Center of the Government Housing Bank reported the Standard Home Construction Price Index for Q1 2022, which stands at 129.8, reflecting an increase of 5.3% compared to the same period last year (YoY) and a 3.9% increase compared to Q4 2021 (QoQ). The factors contributing to the price index increase compared to the same period last year (YoY) include rising compensation in all categories of construction design and system work, with the highest increase in structural engineering at 12.0%. 

Dr. Vichai Wiratkhapan, acting director of the Real Estate Information Center at the Government Housing Bank, revealed that the prices of construction materials have risen for almost all items, particularly steel and steel products, which have increased by approximately 35.0% compared to the same period last year. This is a result of the ongoing conflict between Russia and Ukraine, which has led to higher oil prices and construction material costs. Ukraine and Russia are major sources of steel raw materials globally, with steel products from both countries accounting for about 14% of global steel exports. Russia is the third-largest steel exporter in the world, after China and Japan, while Ukraine ranks eighth. The war between these two countries has significantly impacted steel prices due to the loss of steel production capacity, leading to shortages and increased market prices.

The labor category has not changed compared to the same period last year. (See Charts 1 - 2)

Chart 1: Standard Home Construction Price Index in Bangkok (2010= 100.0)

Chart 2: Growth Rate of the Standard Home Construction Price Index

When analyzing the costs of construction work in each category, it was found that:

Design and System Work

  • Structural Engineering has seen a compensation rate increase of 12.0% compared to the same period last year (YoY) and a 5.4% increase compared to Q4 2021 (QoQ), accounting for 28.9% of the design and system work category.
  • Architectural Work has a compensation rate increase of 2.6% compared to the same period last year (YoY) and a 3.4% increase compared to Q4 2021 (QoQ), accounting for 64.5% of the design and system work category.
  • Sanitary System Work has a compensation rate increase of 2.2% compared to the same period last year (YoY) and a 1.7% increase compared to Q4 2021 (QoQ), accounting for 2.9% of the design and system work category.
  • Electrical and Communication System Work has a compensation rate increase of 7.4% compared to the same period last year (YoY) and a 5.1% increase compared to Q4 2021 (QoQ), accounting for 3.7% of the design and system work category (See Table 1).

Table 1: Components of the Index by Work Category

Construction Materials

  • Wood and Wood Products prices increased by 4.6% compared to the same period last year and by 7.8% compared to Q4 2021.
  • Concrete Products prices increased by 6.8% compared to the same period last year and by 2.9% compared to Q4 2021.
  • Steel and Steel Products prices increased by 35.0% compared to the same period last year and by 18.2% compared to Q4 2021.
  • Tiles prices decreased by -3.2% compared to the same period last year and by -3.4% compared to Q4 2021.
  • Sanitary Ware prices increased by 12.7% compared to the same period last year and by 13% compared to Q4 2021.
  • Electrical and Plumbing Equipment prices increased by 6.6% compared to the same period last year and by 4.7% compared to Q4 2021.
  • Other Construction Materials prices increased by 8.0% compared to the same period last year and by 4.5% compared to Q4 2021 (See Table 2).

Table 2: Components of the Index by Type of Construction Material

Labor labor costs have not changed compared to the same period last year.

Data Compilation Method

The Real Estate Information Center of the Government Housing Bank, in collaboration with the Home Builder Business Association, compiles the Standard Home Construction Price Index quarterly, using the year 2010 as the base year.

For this index, the model house used is the “Happy Thai Family 5” from the Department of Public Works and Town & Country Planning, which is a two-story house with a usable area of 169 square meters, assuming a construction period of approximately 180 days. The construction cost of the house will include operational costs and value-added tax but exclude land prices and land development costs, such as filling and leveling expenses.

The categories of design and system work used to calculate the index include structural engineering, architectural work, sanitary system work, electrical and communication system work, and others.

For the construction materials category, wholesale prices of construction materials in Bangkok from the Ministry of Commerce are used, and for the labor category, the minimum wage data from the Ministry of Labor is utilized to compile the index.

Cautions for Data Usage

The Standard Home Construction Price Index is created to measure changes in the construction costs of homes that individuals hire contractors to build one at a time, but it cannot be used to measure changes in the construction costs of housing developments built by developers who hire contractors to build multiple homes at once.

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Disclaimer

The statistical data and any writings appearing in this report have been obtained from reliable sources or processed from reliable data. The Real Estate Information Center has verified the information to a certain extent, but it cannot guarantee the accuracy or truthfulness and cannot be held liable for any damages arising from the use of the information. Users should exercise discretion and verify as appropriate.