Real Estate Information Center, Government Housing Bank reported that the Current Situation Index for residential property developers in Bangkok and its vicinity for Q1 2023 stands at 46.7, a significant decrease compared to 51.5 in Q4 2022 (QoQ), and slightly lower than 47.1 in the same period last year (YoY). This indicates a decline in confidence among operators and a negative outlook on the current business situation, although there remains a positive expectation for the next six months. Particularly, operators in the stock market have a confidence index of 67.1 for the next six months, showing that this group still holds confidence in the real estate business.

Dr. Vichai Viratakphan, Acting Director of the Real Estate Information Center, Government Housing Bank stated that the slight decrease in the confidence index this quarter can be attributed to reduced confidence in performance, sales, investment, and the launch of new projects and/or phases, which fell between -10.8 to -3.5 points. This may be a result of the policy interest rate hike by the Bank of Thailand, announced on January 25, 2023, increasing by 0.25% per annum from 1.25% to 1.50%, followed by another increase of 0.25% on March 28, 2023, raising it to 1.75%.

However, confidence regarding operational costs has increased by 3.7 points, reflecting that property developers in Bangkok and its vicinity have more confidence in their operational costs due to a certain level of stability. Nevertheless, overall costs remain high, keeping the confidence level below 50% for more than five consecutive quarters.

When breaking down confidence by operator group, it was found that the current confidence index for Listed Companies in Q1 2023 is 50.0, lower than the previous quarter's index of 55.2, but still at the median level of 50.0, indicating that this group maintains confidence in the current business situation.

In contrast, the confidence index for Non-listed Companies in Q1 2023 is 41.9, down from the previous quarter's level of 46.0, and remains below the median of 50.0, indicating that smaller Non-listed Companies are more concerned about negative factors compared to Listed Companies (see Table 1 and Chart 1).

The confidence index for property developers in Bangkok and its vicinity for the next six months (Expectations Index) is 61.4, an increase from the previous quarter's level of 60.5, and above the median of 50.0, reflecting an increase in positive outlook among operators regarding the real estate business in the next six months.

When considering confidence in various aspects for the next six months, it was found that confidence has increased in performance, sales, and investment, rising between 2.4 to 4.9 points, likely due to overall economic recovery driven by the expansion of the tourism sector and foreign investment, particularly from Chinese investors shifting from speculative buying to long-term residential purchases. However, employment, operational costs, and the launch of new projects and/or phases have slightly decreased from the previous quarter by -3.2 and -0.3 points respectively, possibly due to rising construction material costs and the Bank of Thailand's decision not to extend the relaxation of LTV measures, which ended on December 31, 2022, leading to hesitance among developers to launch new projects.

When categorizing operators by company type, it was found that Listed Companies have a confidence index for the next six months of 67.1, up from the previous quarter's level of 61.2, indicating that this group still has confidence in the real estate business.

Meanwhile, Non-listed Companies have a confidence index of 52.9, down from the previous quarter's level of 59.3, indicating a decline in confidence, particularly regarding performance, sales, investment, employment, operational costs, and the launch of new projects and/or phases (see Table 2 and Chart 2).