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Thai People Poorer After 5 years of the Coup
AREA Press Release No. 258/2019: May 14, 2019

Dr.Sopon Pornchokchai, Ph.D. Dip.FIABCI, MRICS
President, Agency for Real Estate Affairs (AREA)

 

Despite a lot of efforts of the Thai coup government, income of Thai people represented by Bangkok households was decreased over time.  The affordability level of the people was weakening as well.

 

According to the statistics of the National Statistics Office of the Royal Thai Government, a average monthly household income in Bangkok was Baht 49,191(or USD 1,537 where Baht 32 was USD 1: https://bit.ly/2NWK8zx) in 2013.  It was substantially decreased to Baht 45,572 (USD 1,424) in 2015 and was very slightly increased (0.3%) to Baht 45,707 (USD 1,428).  Subsequently, it was estimated to Baht 45,799 (USD 1,431) in 2018.  Therefore, during 2013 to 2018, the average monthly income of Bangkok household was decreased for 7%.  However, if inflation was considered, the actual decrease was 10% during that period.

 

Dr.Sopon Pornchokchai, President, the Agency for Real Estate Affairs said that the 10% decrease in monthly income implied the poorer status of Bangkok households since the coup on May 22, 2014.  If the GDP was estimated to grow at 3% annually, Monthly Bangkok household income should have been grown for 16% during the past five years instead of 10% decrease.  Although our coup government tried a lot to remedy Thai economy, the measures might not be effective.

 

Accordingly, housing affordability of Bangkok households was decreased over time as well.  In 2013 while monthly household income was Baht 49,191 (USD 1,537), a new house including a owner-occupied apartment unit offered in Bangkok housing markets was on the average Baht 2.928 million (USD 91,500).  This was the data surveyed by the Agency for Real Estate Affairs which was the first and largest real estate information centre in Thailand.  This made the average house price becoming five times of the annual household income. 

 

However, while the average monthly household income became Baht 45,799 (USD 1,431) in 2018, the average house price offered in the same year was Baht 4.552 millioin (USD 142,250).  Therefore, the proportion of house price and annual household income became 8.3 : 1.  This meant that the affordability of Bangkok household became weakening over time.  A reason of higher house prices in Bangkok was the offers to foreign buyers.  According to the Agency for Real Estate Affairs, some 20% of the supplies were targeted at foreign buyers.  This helped push up the prices and lower the affordability level of local Thai households.

 

Dr.Sopon suggested the coup government to set some barriers for foreign home buyers. Like in Australia, they allowed foreigners to buy only first-handed housing units.  For Singapore and Hong Kong, foreigners have to pay transfer fee as high as 20% to 30%; however, it was free in Thailand particularly in the Easter Economic Corridor (EEC).  Likewise, a minimum house price for foreigners at Baht 5-8 million should be set.  This was applied in Malaysia and Indonesia.