Housing market slows, more stimulus in support packages expected

According to a report from the real estate sector, despite a slowdown in inflation, the residential real estate market has been slow in the first months of 2023.

In general, demand for housing in Thailand has declined and consumer purchasing power remains weak, although the sector hopes to benefit from new government policies.

The leading real estate website DDProperty reports that higher interest rates are a major hurdle for home buyers, leading to a 2% drop in housing demand in the second quarter of this year.

The latest DDProperty Outlook report showed that real estate prices remained stable and the home price index declined for all property categories.

The government's new economic stimulus plan is expected to have a positive impact on the economic recovery as well as stimulate consumer spending.

These factors are expected to contribute to the recovery of the real estate market in the second half of this year.

Consumer interest in buying a home.

The CEO of Think of Living and DDProperty, Vithaya Apirakviriya, said that consumer interest in buying a home, especially among the middle and lower classes, may decline due to uncertain economic trends.

"Unfavorable factors include rising interest rates, increased spending, sThis will increase their burden, so homebuyers may need to review their financial preparedness and plan ahead to cope with the financial demands," he said.

For low-income home seekers, Vitaya suggested resale or secondary housing market projects that offer the same initial prices as an attractive alternative for those who want to own a home of their own now.

Wages in Thailand are not the only factor in potential investor decisions. But low-build properties, downtown and suburban, are in demand.

But DDProperty noted that compared to the pre-pandemic period, prices of detached houses are up 6%, while townhouses are down 5% and apartments are down 20%.

Demand for horizontal residential properties in Bangkok continues to grow steadily in the last quarter, according to DDProperty.

Trends in real estate

A real estate consultant at CBRE Thailand says domestic buyers are opting for low-rise housing, preferring spacious properties with low density and greater adaptability.

Responding to this trend, CBRE heralds that developers will be more active this year in launching low-rise housing projects that focus on real demand.

"Buyers today know what they want," said Artitaya Kasemlawan, head of residential property sales (projects) at CBRE Thailand, adding that important factors on the buyers' list include space functionality, privacy, green space, wellbeing and technology.

For luxury and super-luxury, the list includes anything that meets modern requirements, such as a space that can be used as a home office or a parking lot with a charger for electric cars.

CBRE expects developers to continue to launch apartment projects downtown and on the outskirts of the city, and an important trend is mixed-use projects with a residential and commercial component.

In downtown, CBRE expects developers to continue to concentrate theAt the same time, developers and consumers are expecting policies related to the real estate sector that will make the home buying process easier for Thais despite rising interest rates," said Vithaya.