Weekly Thailand Property News July 10-14, 2023

Real Estate Market in Q3 Bolsters with Promotions and Discounts

The real estate market in Thailand is facing challenges in Q3 2023 due to economic risks. However, there are indications of the country's economic recovery, as confirmed by the Bank of Thailand and affiliated agencies. In an effort to prevent inventory accumulation, developers have reduced the launch of new projects. The market currently has a surplus of unsold properties, valued at 8.71 billion baht, while household debt and increased interest rates have negatively impacted purchasing power. High net-worth buyers are eagerly awaiting government measures to stimulate the sector. Nonetheless, developers are actively promoting their projects through special offers and campaigns, such as substantial discounts of up to 2 million baht and incentives like electric vehicles. The overall objective is to reinvigorate the market in anticipation of forthcoming government initiatives.

Reference: https://www.thansettakij.com/real-estate/570347

Rising Tile and Wage Costs Impact Home Construction Prices in Q2 2023

The Real Estate Information Center has released the home construction price index for Q2 2023, revealing a 12.5% increase in tile prices and a 5.8% rise in wages. These factors, which account for 39.6% of standard house construction costs, are causing concerns about potential increases in housing prices. The index value of 134.0 points shows a 2.1% year-on-year increase but with a slower growth rate than the previous quarter. Labor costs, in particular, have seen a significant rise, which could affect both individual housing construction and the development costs of residential projects.

Wage Costs

Tile Costs

Reference: https://www.bangkokbiznews.com/property/1077852

ASW Acquires 57% Stake in TITLE, Expands Real Estate Presence in Phuket

ASW, a prominent lifestyle real estate development company, has made a significant investment of 1 billion baht to secure a majority stake of 57% in Rhompho Property Public Company Limited, known as TITLE, a well-established condominium developer in Phuket. This strategic move demonstrates ASW's intent to establish a robust presence in the thriving Phuket real estate market and diversify its operations into the promising hotel and tourism sector in the future. ASW's ambitious plans include the development of projects spanning over 80 rai of land, with an estimated value surpassing 14 billion baht, and a target revenue of 10 billion baht within the next three years. By acquiring shares in TITLE, ASW gains access to a loyal customer base, a reliable network of agents, and an experienced management team. This collaboration will facilitate the creation of high-quality projects, leveraging TITLE's expertise in providing housing solutions for international buyers. The partnership between ASW and TITLE aligns harmoniously with the positive growth prospects of Phuket's tourism market, which is anticipated to fully recover by 2024. Currently, ASW oversees a diverse portfolio of more than 50 completed and ongoing projects under various brand names, underscoring their commitment to creating happiness for individuals of all lifestyles.

Reference: https://mgronline.com/stockmarket/detail/9660000063053

Home Builders Association Reports Below-Target Home Building Orders in H1 2023, Calls for Tax Deduction Measures

The Home Builders Association has disclosed that home building orders during the first half of 2023 fell below the targeted levels due to political instability and delays in government formation. Increased labor costs resulting from election campaign policies, coupled with the rise in construction material prices, have had a substantial impact on housing prices. Concerns are emerging regarding potential political movements that could affect consumer confidence and the overall economy. To address these challenges, the association is proposing tax deduction measures to bolster purchasing power and restore consumer confidence. Their recommendation entails allowing consumers who construct houses on their own land to deduct a predetermined value of building costs from their personal income tax, at a rate of 10,000 baht per million, up to a maximum deduction of 100,000 baht. This measure seeks to expedite consumer decision-making and reinvigorate the housing market. Additionally, the association intends to collaborate with commercial banks to provide lending options specifically for building houses, particularly for those valued between 1-3 million baht. Furthermore, preparations are underway for the "Home Builder and Materials Expo 2023," scheduled to take place from September 20-24 at IMPACT Hall 6 in Muang Thong Thani.

Reference: https://www.reic.or.th/News/RealEstate/467614

Nirvana Expands Investment in Luxury Low-Rise Residential Projects, Ventures into Affordable Condominiums

Nirvana Development Public Company Limited (NVD) is strategically expanding its investments in luxury low-rise residential projects to access the affluent market segment. CEO Mr. Sornsak Somwatana disclosed that the company aims to diversify its offerings by venturing into more cost-effective condominiums within the contemporary premium category. The recent addition of The MOST Rattanathibet project aligns with NVD's ambitious growth strategy in the real estate sector. The project capitalizes on the rapid growth potential in the Rattanathibet area, leveraging the advent of the MRT Purple Line. Notably, Nirvana prioritizes environmental considerations and has successfully obtained the Environmental Impact Assessment (EIA) report. Construction for The MOST Rattanathibet is scheduled to commence in late 2023, with an anticipated completion date of 2026. This strategic move underscores Nirvana's dedication to catering to the luxury market while also offering more accessible condominium options for prospective buyers.

Reference: https://www.thansettakij.com/real-estate/570706

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