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2015 Bangkok Housing Markets, 14% Shrinkage.
AREA Press Release No. 102/2015: April 22, 2015

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

According to the latest forecast of the Agency for Real Estate Affairs(area.co.th) which is the largest and most pioneer real estate information and valuation centre in Thailand, the number of newly launched housing units in the whole year of 2015 would be some 14% down from last year.  However, the value of the development would be down for only 6% because of the higher average prices.  This implies that amidst this difficulty in Thai economy, the upper income groups are only slightly affected.

Dr.Sopon Pornchokchai, President of AREA reported that there were 22,294 newly launched units in the Bangkok Metropolitan Region at the total value of 95.019 billion Baht or 2.935 billion US dollars.  The average price of each unit was extraordinarily high at Baht 4.26 million Baht or 131,563 US dollars.  This implies that the buyers at a higher income group are still not affected by the troublesome economy.  Investment on properties along the mass transit system is still popular.  There are not many other choices of good locations anyway.

For the forecast for the whole year of 2015, it is expected that the number of newly launched units will reach 98,094 units which is some 14% below the figure last year. 114,094 units were launched last year.  This is considered a substantial shrinkage of housing market in this year. Real estate is a dependent variable of the country economy.  The exports and the economic growth are all forecasted to be of minimal growth.

However, in terms of the development value in 2015, 323.71 billion of Baht or 10 billion US dollar is expected.  This value is only 6% less than that in 2014.  It is expected that the offered prices of the newly launched units in 2015 would be 3.3 million Baht or 101,915 US dollar which is some 9.3% higher than last year.  Actually, the shrinkage happened in 2014 as well.  The number of newly launched units and the value of the development in 2014 were down for 13% and 11% from the figures in 2013.   If Thai politics are still in this situation, the economy and real estate markets will be in more difficulty.

Cheaper units will not be offered a lot in this year possibly due to the lower affordability of the middle and lower middle income group.  The worsening economy would affect their affordability. However, units at higher prices will still be produced because the well to do persons particularly those government officials and gigantic entrepreneurs will not face difficulties during this period.