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Residential Prices Expected to Increase in Second Half

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A research firm suggests that the price index for new residential properties in Greater Bangkok is likely to continue its upward trajectory in the latter half of the year. This projection comes as older inventory gets absorbed following recent property stimulus measures initiated by the government.


Vichai Viratkapan, the acting director-general of the Real Estate Information Center (REIC), highlighted that the government’s new stimulus measures, particularly aimed at residential properties priced at 7 million baht or lower, are expected to boost housing demand significantly.


“We anticipate seeing the impact of these measures in the second half as they facilitate the clearance of older inventory,” stated Mr. Vichai.


Once the existing unsold units are taken up, developers are poised to introduce new supply at higher price points, consequently leading to an increase in the price index during the latter part of the year, according to Mr. Vichai.


The recently introduced property measures include a reduction in transfer and mortgage fees to 0.01% from the previous 2% and 1%, respectively, for units priced at 7 million baht or below. Additionally, there are reduced interest rates for home loan credit lines of 3 million baht or lower.


According to the REIC, the price index for new low-rise houses and condos available for sale in Greater Bangkok experienced year-on-year increases of 2.5% and 0.2% in the first quarter of 2024, reaching 131.5 and 155.0, respectively.


The index for low-rise houses marked its fifth consecutive quarterly increase, while the condo index rebounded from 154.3 in the fourth quarter of 2023 to 155.0 in the first quarter of 2024, after reaching 155.0 in the third quarter and 155.1 in the second quarter of 2023.


By category and location, the most significant year-on-year increase in the price index was observed for single detached houses in neighboring provinces like Nonthaburi, Pathum Thani, and Samut Prakan, rising by 3.9% to 134.5.


This upward trend has persisted for over seven consecutive quarters since the second quarter of 2022.


The rise in prices was particularly pronounced among projects launched in 2022-23, attributed to escalating construction material costs, as per the center’s analysis.


The area witnessing the most substantial increase for single detached houses encompassed the districts of Bang Phli-Bang Bo-Bang Sao Thong in Samut Prakan for unit prices ranging from 5.01-7.5 million baht.


Following closely were the districts of Lam Luk Ka, Khlong Luang, Thanyaburi, and Nong Sua in Pathum Thani in the 3.01–5 million baht range, followed by the districts of Muang, Lat Lum Kaew, and Sam Kok in Pathum Thani for units priced over 10 million baht.


The year-on-year increase in the price index for townhouses in these provinces exceeded that for single detached houses, rising by 4.1% to 133.8, rebounding from a decline in the fourth quarter of 2023.


The area experiencing the most significant increase in the townhouse category was Bang Phli-Bang Bo-Bang Sao Thong for unit prices ranging from 2.01-3 million baht, followed by Lam Luk Ka-Khlong Luang-Thanyaburi-Nong Sua, also within the same price range.


The price index for condos followed a similar trajectory to that of low-rise houses, with the most substantial year-on-year increase observed in neighboring provinces like Samut Prakan and Nonthaburi, rising by 1.2% to 143.2, according to the REIC.


The area witnessing the largest price increase for condos was the Muang and Pak Kret districts of Nonthaburi in the 2.01-3-million-baht range, followed by Bang Phli-Bang Bo-Bang Sao Thong with unit prices ranging from 1.5-2 million baht.


In Bangkok, the condo price index saw a marginal year-on-year increase of 0.01% to 157.7, with the most significant rise observed in the Huai Khwang-Chatuchak-Din Daeng districts for units priced between 3.01-5 million baht.


Second was the Thon Buri area within the same price range, while third was the Bang Sue-Dusit district for units priced between 5.01-7 million baht.


Mr. Vichai noted, “An improved economy can help enhance housing affordability and increase access to mortgages as housing prices rise.”


Source: Bangkok Post

Yours sincerely,

The editorial team at Invest Bangkok Property


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