The housing market outlook remains hazy for the first quarter as both developers and homebuyers lack confidence in performance and purchases, dampened by elevated interest rates.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said both supply and demand were affected by higher interest rates, which were hiked several times last year to a policy rate of 2.50%.
“Developers face higher financial costs, while homebuyers’ purchasing power declined, ultimately affecting developers’ revenue,” he said.
The REIC surveyed housing demand in Greater Bangkok in November last year at the House and Condo Fair, asking 500 respondents to assess sentiment.
The index in the fourth quarter of 2023 was 44.5, improving from 41.2 in the first nine months, but remaining lower than the median of 50, which indicates homebuyer sentiment is still low.
“The low confidence likely derived from the sluggish economy, affected by several negative factors, particularly rises in interest rates, which are expected to remain at this level for a while,” said Mr Vichai.
In addition, the Bank of Thailand does not intend to ease lending curbs as household debt levels have ballooned.
These factors weighed on home purchasing power and homebuyers’ confidence in purchasing homes, as they are concerned about being rejected for a mortgage, noted the centre.
The survey found 46% of respondents were age 25 to 34, while 60% were employed. Some 35% of respondents earned between 15,001 and 30,000 baht per month.
Source: Bangkok Post
