Thailand's property market faces increasing pressure with rising land and construction costs, increasing the prices of new homes and condominiums, according to the latest Real Estate Information Center (REIC) report.
Over recent years, the housing sector has faced continuous price hikes, driven by several key factors, including soaring construction expenses and land value, especially in prime locations like Bangkok along the BTS and MRT lines.
The REIC data highlights sharp price increases in Minburi, Nong Chok, Lat Krabang, Huai Khwang, Chatuchak, and Din Daeng for new housing estates and condominiums, respectively.
In Q4 of 2024, new housing estate prices saw a 0.8 per cent increase, marking the ninth consecutive quarter of growth, while new condominium prices rose by 3.6 per cent, continuing their growth streak for the eighth quarter in a row. These price hikes are due to rising land, materials, and labour costs, particularly in high-demand areas of Bangkok and along the public transport network.
Some regions have experienced steeper increases than others. Samut Prakan and Nonthaburi saw condominium prices rise by 4.2 per cent, surpassing the 3.4 per cent rise observed in Bangkok. Within Bangkok, the Huai Khwang, Chatuchak, and Din Daeng areas, priced in the 3-5 million baht range, saw the most significant increases.
In Bangkok's outskirts, Samut Prakan, Phra Pradaeng, and Phra Samut Chedi saw significant price increases in the 2-3 million baht range. Developers have resorted to sales promotions, such as increased cash discounts, to encourage buyer demand, with discounts rising from 21.7 per cent to 25.2 per cent quarter-on-quarter.
The new housing estate price index for Bangkok and surrounding areas reached 131.4 points, reflecting a 0.8 per cent increase year-on-year. Specifically, Bangkok saw a 2.3 per cent rise, while surrounding provinces like Nonthaburi, Pathum Thani, and Samut Prakan experienced a 1 per cent decline, largely due to townhouse price reductions.
Detached house prices in Bangkok rose by 2.1 per cent, with notable price hikes in Minburi, Nong Chok, and Lat Krabang. Townhouses saw a more modest 0.3 per cent rise, with Phra Khanong, Bangna, Suan Luang, and Prawet leading the price growth in Bangkok.
The Standard Housing Construction Cost Index (HCCI) also witnessed a 4 per cent year-on-year increase, reflecting the rising prices of building materials and labour. Key materials such as sanitary ware, tiles, and electrical equipment saw price increases ranging from 3.7 per cent to 12 per cent, primarily driven by global oil and energy price fluctuations. Additionally, labour costs increased by 4 per cent. These escalating construction costs have put significant upward pressure on new housing prices when consumer purchasing power is weakening due to slower economic growth.
