Thais’ home purchases failed to pass, up to 80%, transfer of ownership decreased by 4.4%, but average price of residences in Bangkok in 2024 will grow by 5.4% compared to 2023.
Proptomorrow Company Limited organized the annual seminar 2024 on the topic of ‘Bangkok, Four Directions: Property encounters 10 years of debt, Thai real estate will never be the same.’
Mr. Wichai Wiratkaphan, Acting Director of the Real Estate Information Center, Government Housing Bank, revealed that the trend in 2024 is expected to have approximately 350,545 residential ownership transfers, a decrease of 4.4 percent compared to 2023. Of this, approximately 243,088 units will be horizontal residential ownership transfers, a decrease of 6.0 percent compared to 2023, and approximately 107,456 units will be condominium ownership transfers, a decrease of 0.6 percent compared to 2023.
In this regard, if the value of residential property transfers is calculated in 2024, it is expected to be 1,012,760 million baht, a decrease of 3.3 per
cent compared to 2023. It is expected that the transfer of horizontal property will be approximately 717,052 million baht, a decrease of 3.4 percent, and the transfer of condominium property will be approximately 295,707 million baht, a decrease of 2.9 percent.
The average price of housing in Bangkok is expected to grow by 5.4% compared to 2023, but the growth of average income per capita of Thais per year is only 1.4%. If you earn less than 30,000 baht and want to buy a house priced at 7 million baht, the chances of getting a loan are very difficult. Although the government has currently introduced measures to stimulate the real estate sector by reducing transfer fees and mortgage registration fees, we found that the effect was not significant. The transfer amount in the first quarter of 2024 was negative by 13%, while the measure was introduced in April. However, the data for the second quarter showed that the market was still negative by 4.5%, especially in the group that the government supports, houses n
ot exceeding 7 million baht. The statistics are negative for all products. The measures only have a positive effect on the condo and second-hand house markets.
Mr. Wichai also pointed out that Thai real estate in the future is still full of challenges because the population structure is changing rapidly, with an average of 100,000 new houses being built per year. Because in a few years, Thai society will become a super-aged society, with the proportion of elderly people being more than 25% of the entire population, while there are fewer newborns and more single people. There is only opportunity from the demand of foreign buyers, which still needs to be answered to find the appropriateness.
While Mr. Phadet Charoensivakorn, Deputy Managing Director of the Credit Bureau, revealed the terrifying ‘debt’ data of Thais, which can indicate the direction of Thai real estate in the future, when the large group of home buyers, such as Gen Y, has bad debts flooding the system. This was expanded through the macroeconom
ic situation, which is the starting point of the Thai debt problem, which has encountered different economic crises in each period of the past 10 years. In the current situation, the Thai economy has been hit by both the impact of war and reduced spending due to a declining population. The business sector is facing the challenge of the green economy, causing the Thai economy in the second quarter to expand by only 2.3%, which is only a slight increase from the first quarter. Overall, the Thai economy has not been able to recover from COVID-19 comprehensively. While opening the GDP picture for the past 10 years, the Thai economy has never expanded more than 5%. This is a major obstacle for the real estate market because the economic conditions are not conducive. In addition, data from the Credit Bureau found that the loans that have grown every year are not loans for secure groups, but only personal loans because people are willing to pay high interest rates in order to have money to spend and support their li
ves that are having problems from the economy. While the mortgage graph is not growing, the credit market is still affected by the consumer confidence index that has been declining for the past 10 years amidst high interest rates. On the contrary, when interest rates are low, the demand for new loans will increase immediately.
The credit bureau executive also revealed that Thais are currently facing the problem of income and expenses not being consistent. But what is more worrying is that many Thais have more debt than income, which is almost entirely due to economic problems. As a result, Thais currently have a record-breaking debt burden, averaging more than 600,000 baht per household. People with an income of less than 30,000 baht are unable to move. Household debt also causes tourism, which is a major cog in the economy, to shrink. Currently, Thai household debt is 90.8% of GDP based on 8 facts: debt early, debt beyond one’s means, debt without complete or correct information, debt for a long time, debt
due to necessity, bad debt, endless debt, and informal debt, which is a mountain of debt concentrated in the Gen Y group. While we found that home loans were not approved or rejected as high as 80%, almost double last year. Home loans in the group that need special monitoring or SM have been building up since the Covid period, as have bad debt or NPLs. The worrying thing is that in the future, the trend of SM will decrease, but will change to NPLs, more bad debt.
Source: Thai News Agency