2021Residential real estate market falls by 29.1 % in the first quarter of 2021

The residential real estate market recorded a significant 29.1% decline in new sales in the first quarter of 2023, with condominiums being the main factor contributing to the slowdown.

Wichai Wiraktapan, acting director general of the Real Estate Information Center (REIC), said the number of newly sold residential units in Greater Bangkok in the first quarter totaled 21,291 units with a total value of 105.7 billion baht. This is a decrease of 29.1% in quantity and 22% in value compared to the first quarter of 2022. The absorption rate has fallen to 3.5% per month, indicating that it will take about 26 months to sell, compared to 5% and 17 months in the corresponding period of 2022. "The residential real estate market at the beginning of this year has declined significantly compared to the same period last year, especially there is a significant decline in condominium sales," he said.

In the first quarter, the number of newly sold condos fell 48.9 percent year-on-year to 9,710 units worth 36.1 billion baht, a decline of 45.2 percent in value. The absorption rate was 4.1% per month, indicating an approximate selling time of about 21 months. "The significant year-over-year decline can be attributed to a significant increase in new condominiums offered in the first quarter of last year, especially in BoI's affordable condominium segment, which had strong sales numbers," he said. Mr. Vichai said the number of newly launched condominiums in the first quarter was approaching pre-pandemic levels, although sales volume remained lower.

The number of newly launched condominiums in the first quarter totaled 12,981 units worth 30.7 billion baht, down 31.1 percent and 34.7 percent respectively.

Meanwhile, the number of newly sold single-family homes in the first quarter of 2023 rose 5.1% to 11,581 units worth 69.6 billion baht, a decrease of 0.02%. The absorption rate was 3.1% per month, which means the sale will take about 29 months. Semi detached houses showed the highest growth in terms of number of units and value as they matched demand with purchasing power despite successive increases in land costs, building material costs and wages, Mr. Vichai said.

The most popular location for selling low-cost houses was Bang Pli Bang Bo-Bang Sao Thong area in Samut Prakan province with 2,674 units worth 16.5 billion baht and an absorption rate of 5 percent per month. The other top five were Muang Phra Pradaeng Phra Samut Chedi in Samut Prakan, Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi in Nonthaburi, Klong Sam Wa-Min Buri Lat Krabang in Bangkok and Muang Samut Sakhon.

The five most popular locations with the most deals on affordable homes were Bang Yai-Bang Bua Thong-Bang Kruai-Sai Noi, Bang Pli-Bang Bo-Bang Sao Thong, Lam Luk Ka-Thanyaburi, Klong Luang-Nong Sua in Pattaya and Muang Lat Lum Kaew-Sam Kok in Pattaya.

The five most popular locations with the highest number of apartments sold were Klong Luang-Nong Sua, Phra Kanong-Bang Na-Suan Luang-Prawet, Muang Samut Prakan-Phra Pradaeng-Phra Samut Chedi, Muang Nonthaburi-Pak Kret and Huay Kwang-Chatuchak-Din Daeng. "Developers should be more cautious when launching new offerings in the low-cost house sector in Pattaya and new apartments in Bangkok as both areas are experiencing oversupply," Mr. Vichai warned.