10-14 July 2023: Weekly Thailand Property News

Economic Uncertainties Pose Challenges for Thailand's Real Estate Market in Q3 2023

The real estate market in Thailand is currently facing obstacles in the third quarter of 2023 due to prevailing economic uncertainties. However, there are encouraging indications of the country's ongoing economic recovery, as affirmed by the Bank of Thailand and associated institutions. In a bid to mitigate the accumulation of inventory, developers have implemented measures to limit the introduction of new projects. Presently, the market is grappling with an oversupply of unsold properties valued at 8.71 billion baht, while household debt and escalating interest rates have dampened overall purchasing power. High-net-worth individuals eagerly anticipate government-led initiatives aimed at stimulating the real estate sector. Nevertheless, developers are actively promoting their projects by offering appealing incentives, including substantial discounts of up to 2 million baht and even the inclusion of electric vehicles. The overarching objective remains the revitalization of the market in anticipation of forthcoming government interventions.

Reference: https://www.thansettakij.com/real-estate/570347

Q2 2023 Home Construction Prices See Spike in Tile and Wage Costs

The latest report from the Real Estate Information Center unveils the Q2 2023 home construction price index, highlighting a substantial 12.5% surge in tile prices and a notable 5.8% increase in wages. These factors, constituting 39.6% of the total standard house construction expenses, are raising concerns regarding potential hikes in housing prices. With an index value of 134.0 points, the figures indicate a 2.1% year-on-year upturn, albeit at a slower pace compared to the previous quarter. Of particular significance is the substantial surge in labor costs, which has the potential to impact both individual home construction projects and the overall development expenses of residential ventures.

Wage Costs

Tile Costs

Reference: https://www.bangkokbiznews.com/property/1077852

ASW Expands Presence in Phuket's Real Estate Market Through Acquisition of Majority Stake in TITLE

ASW, a renowned real estate development company recognized for its lifestyle properties, has made a substantial investment of 1 billion baht to secure a controlling stake of 57% in Rhompho Property Public Company Limited, operating under the brand name TITLE, a highly reputable condominium developer in Phuket. This strategic move exemplifies ASW's unwavering commitment to establishing a strong presence in Phuket's thriving real estate market and diversifying its operations to include the promising hotel and tourism sector in the future. ASW's ambitious plans encompass the development of projects across more than 80 rai of land, with an estimated value exceeding 14 billion baht and a targeted revenue goal of 10 billion baht within the next three years. Through this acquisition, ASW gains access to a loyal customer base, a reliable network of agents, and a seasoned management team. This collaboration will facilitate the creation of high-quality projects, leveraging TITLE's expertise in providing housing solutions for international buyers. The partnership between ASW and TITLE aligns harmoniously with the positive growth prospects of Phuket's tourism market, which is anticipated to achieve full recovery by 2024. Currently, ASW oversees a diverse portfolio of over 50 completed and ongoing projects, underscoring its unwavering commitment to curating happiness for individuals across diverse lifestyles.

Reference: https://mgronline.com/stockmarket/detail/9660000063053

Home Builders Association Reports Below-Target Home Building Orders in H1 2023, Calls for Tax Deduction Initiatives

The Home Builders Association has unveiled that home building orders during the first half of 2023 fell short of expectations due to political instability and delays in government formation. The mounting labor costs resulting from election campaign policies, coupled with the surge in construction material prices, have exerted a significant impact on housing prices. Emerging concerns revolve around potential political movements, which could undermine consumer confidence and the overall economy. To address these pressing challenges, the association has proposed tax deduction measures aimed at bolstering purchasing power and restoring consumer confidence. Their recommendation involves enabling consumers constructing houses on their own land to deduct a predetermined value of building costs from their personal income tax, at a rate of 10,000 baht per million, up to a maximum deduction of 100,000 baht. This measure seeks to expedite consumer decision-making and reinvigorate the housing market. Furthermore, the association plans to collaborate with commercial banks to provide tailored lending options specifically for house construction, particularly for homes valued between 1-3 million baht. Additionally, preparations are underway for the upcoming "Home Builder and Materials Expo 2023," scheduled to take place from September 20-24 at IMPACT Hall 6 in Muang Thong Thani.

Reference: https://www.reic.or.th/News/RealEstate/467614

Nirvana Expands Investment Portfolio with Upscale Low-Rise Residential Projects and Affordable Condominiums

Nirvana Development Public Company Limited (NVD) strategically expands its investment in upscale low-rise residential projects to target the affluent market segment. CEO Mr. Sornsak Somwatana emphasizes the company's commitment to diversifying its portfolio by entering the more accessible condominium market, catering to the contemporary premium category. The recent addition, The MOST Rattanathibet project, aligns with NVD's ambitious growth strategy in the real estate sector, capitalizing on the flourishing potential in the Rattanathibet area, facilitated by the MRT Purple Line. With a strong emphasis on environmental considerations, Nirvana has successfully obtained the Environmental Impact Assessment (EIA) report. Construction for The MOST Rattanathibet is scheduled to commence in late 2023, with an anticipated completion by 2026. This strategic move underscores Nirvana's dedication to meeting the demands of both luxury buyers and those seeking cost-conscious options.

Reference: https://www.thansettakij.com/real-estate/570706

Search Now