In the Greater Bangkok region, the Housing Purchase Confidence Index (HPCI) exhibited a decline during the first quarter of 2024 compared to the fourth quarter of the previous year. This drop is believed to be a consequence of the gradual increment in policy interest rates seen over the course of 2023.
Vichai Viratkapan, the interim director-general of the Real Estate Information Center (REIC), highlighted the impact of five interest rate hikes implemented in 2023 on this year’s home purchasing dynamics. The ongoing elevated interest rates have directly influenced the purchasing capacity of prospective homebuyers, especially in the context of an economic deceleration, where individuals tend to exhibit greater caution in their expenditures. Vichai further noted that the overall household debt has surpassed 90% of the country’s GDP, contributing to the prevailing financial constraints felt by many.
The HPCI for the first quarter of 2024 was reported at 39.2, down from 44.5 in the fourth quarter of 2023, indicating a notable decrease in homebuyer confidence levels. An index reading below 50 suggests that potential homebuyers are displaying low or minimal confidence.
Challenges in financial preparedness have emerged among aspiring homeowners, leading to apprehensions regarding mortgage applications and the potential for rejection from financial institutions. As a result, there has been a noticeable decline in both the number and total value of housing transfers in Greater Bangkok, plummeting by 24% and 25.2%, respectively, during the first quarter of 2024 compared to the previous quarter of 2023.
The calculation of the HPCI involved participant interviews at the House & Condo Expo held between March 21-24, alongside surveys conducted with respondents through the REIC website. The surveyed individuals, aged 18 and above and with intentions to purchase a home, comprised a diverse demographic, with a significant representation from Generation Y and Z demographics.
The data revealed varying motivations behind home purchases, with an increasing interest in investment or rental properties evident in the first quarter. Additionally, preferences for second-hand homes witnessed a rise, indicating shifting trends in the housing market. Buyers exhibited a preference for units priced in the range of 10-15 million baht and 15-20 million baht, encompassing a range of considerations from investment purposes to personal residence.
Popular locations for prospective homebuyers in Bangkok included areas situated along mass transit routes and close to employment hubs, such as Rama IX, Bang Na, Bang Kae, Lat Phrao, and Huay Khwang. These preferences reflect a blend of aspirations for investment growth, financial stability, and lifestyle choices among potential homebuyers in the region.
