On the uncertainty of doing business in 2023 due to the risk of the global economy entering a recession It's a big global problem.

Recently, "KKP-Kiatnakin Phatra Bank" has prepared an interesting real estate trend report for the year 2023.

with the head stating that "Recovery slowed down from interest rates and LTV measures" when deciphering to explain again to be easy to understand for developer Expectations of recovery this year was put off hope

From 2 main reasons because interest rates increase and the Bank of Thailand canceled measures to relax LTV

2022 still going strong

Statistics for the year 2022, 395 new home-condo projects, 106,421 units, a leap growth from 2021.

There are 53,778 new condominium units launched for sale, an increase of 129% from 2021, most of them developed by big brands listed on the stock exchange.

The price of a new condominium unit opened in 2022 is no more than 2 million baht, 59% of the proportion because it is an affordable price for Thai buyers. As for foreign buyers, it is still relatively small compared to 2018-2019.

While new low-rise home sales increased 44.5% from 36,432 units in 2021 to 52,643 units in 2022.

Single-detached house products had an increase of 113% and townhouses, an increase of 20%.

Townhouse - twin house protagonist

15,708 units of townhouses worth 2-3 million baht, followed by townhouses and twin houses of 3-5 million baht, with 13,929 units newly launched.

The price group of 3-5 million baht has the highest sales, selling 14,165 units or having more sales than the number of newly launched units. Real demand customers buy for real living. and is the main purchasing power

Single-detached houses with the highest launch price of 5-10 million baht, 56% share

As for the most newly opened condos, the price is less than 2 million baht, 59% of the total, 27,718 units are sold, 21,634 units are sold, or 78% of the newly opened units are sold.

Stumbled on rising interest rates-LTV

For the year 2023, the KKP Business Credit Division analyzes the real estate market in the Bangkok-perimeter area and found that there is a chance of a slowdown due to the uncertain economic situation. Interest rate hikes and tighter LTV-loan to value measures and expects sales in 2023 to slow down by 3-4% compared to 2022

In contrast to the "number of outstanding units" may be the highest in the past 5 years.

Data as of 2022, Bangkok-perimeter area There is a 19.5% increase in the number of ownership transfers of new homes and second-hand homes compared to 2021 because of the positive economic factors that tend to improve. Interest is low, there is a relaxation of LTV (100% loan for home-condominium purchases)

plus on-top with measures to stimulate real estate from the government in reducing the transfer-mortgage fee from 3% to 0.01% or 30,000 baht per million to 300 baht per million

Resulting in a clear growth group in 2022, namely condos 1-2 million baht, including the Covid era (2021-2022), it was found that newly opened condominiums focus on prices not exceeding 2 million baht.

Including the Covid era where sales stumble abruptly Entrepreneurs have to compete to drain the stock ready to live in chaos.

low-rise house The group that expands well has a starburst condition. Starting from the price of 5-10 million baht, the price of 10-20 million and more than 20 million baht.

However, in 2023, low-rise housing may not be able to expand continuously from 2022 because of the same risk factors. more stringent.”

The more expensive the house, the better it sells.

The focus is that this year's growth momentum may falter. In the opposite direction with new project launches

which is expected to continue to be strong, close to 2022, at 108,600 units

Of these, 51% of condo products are concentrated in the price range of no more than 2 million baht and 2-3 million baht.

As for low-rise houses, townhouses are expected to be the group with the most new units entering the market, at least 28,000 units, with the main group priced at 2-3 million baht and 3-4 million baht.

As for detached houses, the main market is still a group of 5-7 million baht and 7-10 million baht.

The observation point is that more new projects are opened in houses priced at 15-25 million baht and 25-50 million baht.

Because in 2022, sales are very good, but the market share is no more than 5% of all units sold.

The stock flooded 2.3 hundred thousand units.

KKP estimates that overall demand will slow down. The origin is that the sales estimate is reduced by -3% to -4%, resulting in "accumulative unsold units" having a chance to be saturated in some areas.

The keyword is likely to be “Accumulative sales units” will be at the highest level in the past 5 years (2018-2022) or more than 230,000 units.

The market for buying condos To invest in the inner Bangkok zone for foreign customers at a price of 5-10 million baht with condos along the Purple Line. Still focusing on the release of existing inventories.

Image of recovery in '12-13

As of 2022, Bangkok-perimeter There is an increase in the transfer of ownership of new homes and second-hand homes from 160,233 units in 2021 to 191,616 units in 2022, representing a 19.5% growth from 2021.

Positive factors from the economy tend to improve. Easier application for housing loans (LTV) and real estate stimulus measures since the end of 2021

It was found that "second-hand homes" had a growth rate of 38% from 67,315 units in 2021 to 93,142 units in 2022.

As for new houses or first-hand houses There was only a 2.6% increase in ownership transfers from 95,952 units in 2021 to 98,474 units.

The focus is on the number of units added. Mainly comes from the transfer of condos priced at 1-2 million baht. Including draining condo stock Completed and ready to stay at the sales interruption during the COVID period.

As for the transfer of ownership of low-rise houses Positive results from low interest rates, LTV easing, resulting in good growth It has a ratio of 63% horizontal to 37% high.

Looking at the risk factors - the market is not growing

Continued in 2022 in 2023, there are positive signs that will come back close to the pre-Covid era (2018-2019) from the recovery of the tourism business. But there are still negative factors surrounding such aspects.

The KKP Business Credit Division analyzed that The Bangkok-perimeter property market in 2023 is likely to slow down due to negative factors. that is still more than a positive factor which will significantly affect purchasing power as follows:

"Positive factors" 1. Expected GDP growth in the range of 2.7-3.7% (3.6% forecast), although the tourism sector in Thailand improved. But the Thai economy was affected by the global economic slowdown anyway.

2. The tourism sector is likely to recover in 2023, estimating 25 million foreign tourists, the value of tourism income is 1.2 trillion baht.

3. Opening of electric train services "Yellow-Pink Line" in 2023-2024

4. Bangkok City Planning Trends That will be used in 2024, resulting in some areas being able to develop houses at a lower price.

Open 8 pressure factors

“Negative factors” are as follows:

1. It is expected that exports will continue to slow down, possibly negative by more than 10% in the first quarter of 2023.

2. Government measures to reduce transfer fees in 2023, shrinking, previously reduced by 2% to only 1%, while the mortgage fee used to be 1%, this year to be paid in full. Equal to the transfer fee + 3% mortgage, used to be reduced to 0.01%, this year reduced to 1%, equal to people having to pay 2%

3. Thai inflation increases in line with global inflation. Including inflation in the service sector may increase.

4. Interest rates are still in an upward direction. But may stop raising interest rates earlier than expected. The risk of rising interest rates is a crisis in the financial sector.

5. High household debt Pressure on consumption and increase in bad debt greatly affecting low-income people

6. Domestic consumption will recover in 2022 following the opening of the city. But it is expected to start to slow down after inflation rises more than wages.

7. The LTV relief ended on December 31, 2022. In the past, it affected those who applied for a loan to buy a second home or more, and houses with a price of more than 10 million baht in 2023 had a higher down payment burden.

8. Increased project development costs such as land prices, transportation costs, wages, etc.

horizontal island edge of the city

KKP is positive in 2023, seeing opportunities to expand some product groups in certain locations as follows:

For low-rise housing products, it was found that "Bangna zone" still expanded well in the group of 2-3 million baht, but the products began to be less. being replaced by townhouses and twin houses of 3-5 million baht

"Rama 2 Bang Khae" growing in the group of 5 million baht or more

"Bang Bua Thong" detached houses, 3-5 million baht, began to lack, being replaced by twin houses.

“Rangsit” grew well from townhouses worth 2-3 million baht, but competition was high. Supply is plentiful.

"On Nut, Srinakarin, Bangna, Ratchaphruek" houses 10-15 million baht with sales growth.

"Bangna, Krungthep Kreetha, new cut", a luxury home zone of 10-20 million and more than 20 million baht, still interesting, but may not be as good as 2022 from export problems and running out of LTV help

Campus condos are hot.

As for the location of the condo, look at

“Bangna, Srinakarin, near educational institutions (Campus Condo)” price 1-2 million baht can still grow

With "Lat Phrao, Bangkapi, Srinakarin", the price is 2-3 million baht, the market is getting better. From the opening of the yellow line train

Beware of oversupply

KKP sends best wishes to developers. The project should be developed carefully.

Especially condos of 1-2 million baht that have been opened for sale in 4 zones, namely "Bangna, Rangsit, Petchkasem, Ramindra zones".

In addition, "Inner Sukhumvit", the condo buying-selling market not yet recovered

Including "Bang Sue, Tao Poon, Rattanathibet" which mainly focuses on releasing existing inventory.

coin on the other side Purchasing power goes well in the price segments of 3-5 million baht, 5-7 million baht, and 10-15 million baht.

Especially low-rise houses in the area of "Bangna, Rama 2-Bang Khae, Bang Bua Thong, Ratchaphruek".

The most popular product group turned its polarity back to semi-detached houses priced at 5-10 million baht and single detached houses at 10-15 million baht, which grew well in the past.

For luxury houses 20-50 million baht in the location "Bangna-Krungthep Kreetha New Cut" is also an interesting option.

But must control the amount of housing stock and the size of the project to suit the size of the target customer group.

The vacant land index Q1/66, Muang Non-Bang Bua Thong trading sales spill over, pushing the purple line to be expensive again.

Real estate through deadlocked loans, pulling Nonbank to "give a down payment loan"

Source:https://www.prachachat.net/property/news-1289452

Date 15/05/2023