Sunday, March 20, 2022
ttb analytics Looking at the direction of real estate business in year 65 recoverwith support from LTV measures and accelerated demand to buy before prices move in line with higher construction costs as well as suggesting adjustments to strategies in response to factors and global trends that change in the long run
The real estate sector as a whole has been in a downturn from the COVID-19 pandemic for more than two years, with weak purchasing demand and residual supply, whether it’s low-rise housing or condominiums. reflected from the income of the real estate business in the SET contracted by 11 percent in 2020, but as the economy began to improve in the last quarter of 2021, coupled with the measure of LTV (Loan to Value Ratio) supported by the Bank of Thailand (BOT). ) This year, the real estate sector has a tendency to recover. but has not returned to pre-epidemic levels. This was due to the slow recovery of purchasing power in the country. and construction costs that have risen rapidly, therefore, it is recommended that operators speed up strategies for stocking to accommodate the demand arising from measures and housing prices that tend to move up and the trend of rising interest rates For the long term, there are still many factors that determine the direction of the real estate business in the future. Advise entrepreneurs to adjust their strategies in response to changing behavior trends of consumers during the COVID-19 outbreak. and structural factors that change
Housing demand slowly recovered in the first half of the year. amid the pressure on construction costs
Positive factors stimulate short-term demand for real estate business this year. consists of government measures including extending the time to reduce the transfer fee and real estate mortgages worth no more than 3 million baht, to 0.01% until the end of 2022, and the BOT relaxed the LTV measure from 90% to 100% for the first residence with a price (collateral value) of more than 10 million baht. and the price is less than 10 million baht for the second house onwards. As for the temporary easing of LTV measures to 100% this year, it is expected to stimulate housing demand, especially from those who want to have more homes accordingly. Lifestyle changes during COVID-19 and those with high purchasing power to improve This is reflected from the number of new mortgage accounts released during the period when the LTV measure is more than 90% (2016-2018) tends to increase, while during the LTV measure to prevent speculation (Year 2019), the number of residential loan accounts New residents tend to decline continuously during the Covid-19 outbreak situation.
However, during the first half of this year The recovery in purchasing power is expected to be slow as it faces higher inflation pressures and concerns regarding the COVID-19 situation. where the number of infected people is still high while the supply side real estate operator face the cost of building materials energy cost wages tend to be higher As a result, the outlook for real estate business in 2022 has begun to recover but has not returned to normal levels. as well as an upward trend in interest rates It will be a reinforcement to make a decision to buy real estate. This is a positive effect for operators to be able to drain their existing housing stocks. ttb analytics expects real estate income in the stock market It is likely to expand by 5 percent from a contraction of 3.3 percent in 2021.
various economic factors Determine the direction of the real estate sector in the long term
Going forward, the real estate sector must be prepared to cope with the changing economic and structural factors. Since the situation of household debt is high due to the slow recovery of income. Consumer behavior and lifestyle changes following the Covid-19 situation Foreign investment tends to improve. This will affect the demand for foreign housing. While the population in the next 10 years is likely to be stable at regarding 67 million, but the working age population is likely to decline. (estimated by Office of the National Economic and Social Development Council (NESDB), in contrast to the rising construction cost level and the trend of rising interest rates. From these factors, entrepreneurs need to prepare for strategies to expand their business in the future. and create opportunities in the housing market to increase sales, such as “stay free” or “stay first, pay later”, including targeting potential customers who do not yet have access to credit At the same time, it is a good opportunity for consumers to have a variety of options to buy housing that is in line with their lifestyle, environment and at a reasonable price level.
