Home price index rises in first quarter, harbinger of rising costs

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According to the Real Estate Information Center (REIC).

Acting REIC chief executive Vichai Viratkapan said the price index for new low-rise houses and condos available for sale in Greater Bangkok in the first quarter of 2022 rose to 127.3 and 151.7 compared to 126.8 and 151.2 in the fourth quarter of 2021, respectively.

“They rose for the first time since the second quarter of 2021,” he said. “This may suggest that residential prices will be higher due to higher material prices, wages and land prices.”

By location, the price index for low-rise houses in Bangkok was 126.2, up 0.3% qoq but down 0.7% yoy, while that of Nonthaburi, Pathum Thani and Samut Prakan was 128.4, up 0.6%. and down 0.5%, respectively.

By category, the single-detached house price index was 125.8, up 0.7% per quarter and down 0.5% per year. The townhouse index was 129.0, up 0.2% and down 0.9%, respectively.

The condominium price index in the first quarter of this year was 151.7, up 0.3% from the fourth quarter of 2021, but down 0.3% year over year.

“Prices for new condos in Greater Bangkok will rise, driven by new construction costs, after unsold inventory with lower construction costs was largely absorbed by the market last year,” Vichai said.

However, comparing the price index of low-rise houses and condos on a yearly basis, the first quarter of 2022 still recorded a decline for five and six consecutive quarters, respectively.

“The developers assessed that real-demand buyers still had limited purchasing power due to the sluggish economy, affected by two years of pandemic and negative factors of the Russian-Ukrainian conflict,” he said. he declares.

Vichai said consumers are facing higher inflation and a rising cost of living this year, limiting economic growth as many think tanks have downgraded their outlook for Thai growth by a factor of one. range of 3.5 to 4.5%.

He said a key factor behind the six consecutive quarters of decline in the condominium price index is lower demand from overseas buyers, especially the Chinese, who are struggling to get to Thailand. . Other factors include lower demand from investors and speculators due to the economic downturn in the post-pandemic period, the Russian-Ukrainian war and lending restrictions, Vichai said.

According to REIC, the most popular campaign in the first quarter was cash rebates, which reached 46% for low-rise homes and 54% (including offers to stay free for 1-2 years) for condos, versus 29% and 28%% in the fourth quarter of last year, respectively. Second, there were freebies at 28% for low houses and 24% for condos, down from 44% and 45%, respectively, and then a waiver of expenses on transfer dates like transfer fees or common portion fees .

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