The Covid-19 crisis has impacted Thailand’s housing market in the first quarter of this year not only in investments but also sale of housing, said Vichai Viratkapan, bank inspector and Real Estate Information Centre (REIC) head at Government Housing Bank – a state enterprise reporting to the Ministry of Finance.

However, he said, the slowing of demand and supply has balanced the market, reducing the risk of problems from excess supply.

In the first quarter, 89,024 units of ownership were transferred nationwide, down 16.7 per cent from the fourth quarter of last year, but up 2.5 per cent year-on-year, with total value of 210 billion baht ($6.6 billion).

House ownership transfer in the Bangkok metropolitan area in the first quarter was 45,678 units, down 18.3 per cent quarter-on-quarter and 4.4 per cent year-on-year. The value of house ownership transfer was 129.406 billion baht, down 24.4 per cent quarter-on-quarter and 2.7 per cent year-on-year.

The housing ownership transfer value in the region in the first quarter totalled 43,346 units, down 14.9 per cent quarter-on-quarter but up 10.9 per cent year-on-year. The value of ownership transfers was 80.888 billion baht, down 13.5 per cent quarter-on-quarter but up 25.0 per cent year-on-year.

The REIC expects that there will be 311,719 units of ownership transfers nationwide this year, down 16.7 per cent from last year. The total value of ownership transfer will be 746.206 billion baht, down 14.8 per cent year-on-year.

The Bangkok-metropolitan area will have 160,350 units of residential units, a decrease of 19.1 per cent year-on-year, with a total transfer value of 472.401 billion baht, down 17.4 per cent in value year-on-year. Total regional units will be 151,369, with the total value of transfer at 273.805 billion baht, down 14 per cent and 9.9 per cent year-on-year respectively.

New individual housing loans

The total value of individual housing loans was 138.238 billion baht in the first quarter, down 13 per cent year-on-year. The REIC expects that the total number of new housing loans for individuals nationwide will be 571.196 billion baht by year’s end, down 10.8 per cent year-on-year.

New housing supply during the quarter showed that 60,165 units of residential building permits were issued nationwide, down 17.9 per cent quarter-on-quarter and 27.7 per cent lower year-on-year.

The number of residential construction permits in the Bangkok-metropolitan region was 20,590 units, a decrease of 18.6 per cent quarter-on-quarter and 36.5 per cent lower year-on-year.

As for regional housing supply, 39,575 units of residential building permits were issued, down 27.8 per cent quarter-on-quarter and 30.9 per cent lower year-on-year.

The REIC estimates that 256,601 units of residential buildings permits will be issued nationwide this year, down 16.5 per cent from last year.

In the Bangkok-metropolitan region, there will be 97,441 units of residential building permits, down 20.7 per cent compared to last year. In the regions, it is expected that 154,160 units of residential building permits will be issued, down 22.7 per cent year-on-year.

A survey of new residential projects for sale found that there were 15,932 units of all types of new homes for sale in the Bangkok-metropolitan region during the first quarter, down 49.3 per cent quarter-on-quarter and down 29.6 per cent year-on-year.

It is estimated that by the end of this year, in the Bangkok-metropolitan region alone there will be 79,408 units of new housing for sale of all types, consisting of 35,734 units of newly-launched housing projects and 43,674 units of newly-opened condominiums, down 19.9 per cent year-on-year.

Meanwhile, the number of completed housing projects registered in the Bangkok-metropolitan region in the quarter also decreased with only 21,260 units registered, down 24.7 per cent quarter-on-quarter and down 12.3 per cent year-on-year.

It is expected that by year’s end there will be approximately 80,563 units of registered completed housing units, down 27.8 per cent compared to last year.

Housing market in 2020

The REIC expects that this year, despite the country’s overall economic slowdown, the housing market will not face the severe problems it did in 1998, due to adjustment in both demand and supply.

In addition, the “New Normal” trend in the housing market points to consumers being more interested in living in a house than a condominium. But, due to their tight budget, customers have to choose housing at a price that is within their ability to pay by instalments.

The REIC expects that in the fourth quarter, those with income stability, such as civil servants and those with regular salary, will return to buy housing.