Guru-entrepreneurs predict that real estate in 2023 will continue to expand slightly Concerns regarding rising costs affecting new construction projects Hoping for signs of economic recovery – tourism – foreigners returning to invest
Through the year 2022, the overview of the real estate market throughout the year The low-rise home market continues to grow. While the condominium market, despite the growth rate but still not as much as it should be The Real Estate Information Center or REIC estimates that in 2022, the overall real estate market has grown over 2021 at 87%.
Krungthai COMPASS estimates that the housing market in Bangkok and its vicinity in 2022 is worth 604 billion baht, a 3.3% increase from the same period last year.
While in 2023, it is expected that the total real estate market will grow regarding 4.2% with the main supporting factors from
1. The recovery of the Thai economy
2. Return of foreign purchasing power
3. Measures to stimulate the real estate sector from the government, such as measures to relax the LTV criteria and measures to reduce transfer-mortgage fees, etc.
Costs hit cheap condos
Mr. Wichai Wiratkapan, Inspector of the Government Housing Bank and acting director Real Estate Information Center or REIC mentions the overview of the real estate market in 2023 that the trend of new launches Still going on as business starts to recover. despite LTV measures
It is expected that The overall launch of new projects will be at 98,581 units, divided into 40,270 condo units and 58,312 housing units.
However, what is worrisome is the low-priced condo market that is in a critical situation. due in part Affected by increasing construction costs, including land, labor, interest, inflation, etc., in contrast to the declining purchasing power of customers.
as well as the luxury condo market That has been affected by foreign demand, especially Chinese people, has not returned. While the Thai customers are not in the mood to buy Make next year the project developer will be tired for another year.
Piya Prayong, Chief Executive Officer of Pruksa Real Estate Public Company Limited, has a consensus that Although the condo market will pass the lowest point But the market hasn’t recovered yet.
In this year 2023, the condo market that can still go. It is expected to be in the mid-market with a price of 2-5 million baht that still has real demand. The luxury condo market Must wait for the right timing. Especially the purchasing power from Chinese people who will come back. and have to wait for the economic situation to get better than this
Hoping that the economy, tourism, exports will revive, supporting the real estate market in 2023 to grow
Mr. Uthai Uthaisangsuk, Chief Operating Officer of Sansiri Public Company Limited, said that next year if the economy is good, tourism, good exports, the condo market will return. increased purchasing power
especially luxury condos have to wait for the economy to improve first because during the period that the absorption rate of luxury condos was not as good as it should have been But there is still enough supply left. but the demand has not completely absorbed You have to wait for the right timing to start working on the project. because the market has not fully recovered
Mr. Surachet Kongcheep, Managing Director of Property DNA Co., Ltd. (Property DNA), forecasts the trend of the real estate market in 2023 that under the assumption that the Thai economy is expanding well. Which comes from the push, for example, more foreigners come to travel in Thailand, the government continues to invest in infrastructure
from such factors will result in the Thai private sector to invest more and foreign investment continues should result in the GDP of the country grow more than 3%, which when the economy is good Real estate will grow, worth investing because people will have more income.
However, in 2023, controversial issues in many regions must be kept an eye on and the direction of oil prices, interest rates and inflation will be important factors for the real estate market.
KASIKORNBANK keeps an eye on real estate challenges
Kasikorn Research Center estimates that the housing market trend in 2023, real estate developers A more careful perspective must be added. Due to the market environment with high uncertainty, both the economic recovery and the purchasing power that has not yet fully recovered. As businesses face more challenges
In addition to the economic uncertainty, especially from the trend of major global economies entering a slowdown, The market still has many challenging factors and must be monitored as follows:
- Renewal of measures to alleviate the burden of expenditure on the purchase of public housing Still need to wait for clarity, including measures to reduce ownership transfer and mortgage fees. For housing with a price not exceeding 3 million baht, which will end on December 31, 2022.
However, in the event that the authorities renew such measures would be a positive factor for the housing market It is estimated that for every 1 million baht, home buyers will save regarding 2.98% of the cost from this measure, or 29,800 baht.
Kasikorn Research Center estimates that in 2023, the transfer of housing ownership in Bangkok and its vicinity (Including legal entities and individuals) in 2023 should be at 1.75-1.82 hundred thousand units, shrinking 2.8% to expanding 1.1% from expected growth of 7.5% in 2022.
- Potential interest rate hikes in 2023 put pressure on housing purchasing power For buyers who need to rely on credit from financial institutions This is because most of the housing loans are floating rate contracts. Even though the installment period is a long term
- cost hike affect housing prices and the liquidity of entrepreneurs
As for the cost of major business operations, there is a continuous upward trend, such as land prices, construction materials prices. wages including financial costs
When the cost of doing business increases Will inevitably affect housing prices in 2023 to rise At the same time, some operators may have additional costs in terms of land and building tax.
- Oversupply in the market remains high. Even in the past, entrepreneurs have rushed to market some But going forward, there will still be completed housing to fill. This will result in more intense competition.
Kasikorn Research Center therefore views that in 2023, the launch of new housing projects in Bangkok and its vicinity may be reduced to 89-96 thousand units, or a contraction of 6.3% to an increase of 1.1% compared to the acceleration in the year. 2022, with the launch of condominiums likely to slow down from many launches in 2022
Therefore, it can be seen that real estate in 2023 still faces many challenges and uncertainties. The important thing is that entrepreneurs must be prepared to do business. and ready to adapt to be able to compete especially cost management in a situation where total costs are increasing
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