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Anticipated Surge in Residential Prices in the Latter Half

Anticipated Surge in Residential Prices in the Latter Half

As per a research firm, the price index for new residential supply in Greater Bangkok is poised to see a continual increase in the latter half of the year. This surge is expected as older inventory gets absorbed following the implementation of property stimulus measures commencing this month.

Vichai Viratkapan, the acting director-general of the Real Estate Information Center (REIC), has mentioned that the government’s recent stimulus initiatives aimed at residential properties priced at 7 million baht or below are likely to boost housing demand. He emphasized that the effects of these measures will become more apparent in the second half as they aid in depleting the inventory of older properties.

After the existing unsold units are taken up, developers are expected to introduce new supply priced at higher rates. This transition is anticipated to drive the price index up in the latter part of the year. The property measures include reductions in transfer and mortgage fees to 0.01% from 2% and 1% respectively for units priced at 7 million baht or lower, in addition to lowered interest rates for home loan credit lines of 3 million baht or less.

The REIC reported that in the first quarter of 2024, the price index of new low-rise houses and condos available for sale in Greater Bangkok showed an annual rise of 2.5% and 0.2% respectively, reaching 131.5 and 155.0. Notably, the index for low-rise houses saw an increase for the fifth consecutive quarter, while the condo index rebounded from 154.3 in the fourth quarter of 2023.

The biggest year-on-year surge in the price index was recorded for single detached houses in Nonthaburi, Pathum Thani, and Samut Prakan, increasing by 3.9% to 134.5. This rise has been continuous for over seven quarters since the second quarter of 2022.

The study highlighted that rising construction material costs were a key factor influencing the prices of projects launched in 2022-23. The most significant increase in single detached houses was concentrated in specific districts, with notable gains observed in different price ranges across various provinces.

For townhouses, the year-on-year price index increase surpassed that of single detached houses, rising by 4.1% to 133.8 and rebounding from a decline in the fourth quarter of 2023. Similarly, condos followed a comparable trend to low-rise houses, with the most substantial increase in neighboring provinces.

The article also mentioned specific areas, price ranges, and districts where significant price increases were observed in each housing category. Overall, the property market is expected to witness growth in response to the government’s stimulus measures and other economic factors.

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