The price index for new residential supply in Greater Bangkok should continue to rise in the second half as older inventory is absorbed following property stimulus measures starting this month, according to a research firm.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the government's new stimulus measures for residential properties priced 7 million baht or lower should increase housing demand.
"The impact will be evident in the second half as the measures will help drain the inventory of old costs," he said.
After the unsold units are absorbed, developers will launch new supply priced for higher costs, leading to increases in the price index in the second half, said Mr Vichai.
The property measures include a cut in transfer and mortgage fees to 0.01% from 2% and 1%, respectively, for units priced 7 million baht or lower, along with reduced interest rates for home loan credit lines of 3 million baht or lower.
According to the REIC, the price index of new low-rise houses and condos available for sale in Greater Bangkok in the first quarter of 2024 rose by 2.5% and 0.2% year-on-year, respectively, to 131.5 and 155.0.
The index of low-rise houses increased for a fifth consecutive quarter, while the condo index picked up from 154.3 in the fourth quarter of 2023, after posting 155.0 in the third quarter and 155.1 in the second quarter of 2023.
By category and location, the largest year-on-year increase in the price index was for single detached houses in three neighbouring provinces -- Nonthaburi, Pathum Thani and Samut Prakan -- with a rise of 3.9% to 134.5.
This marked an increase over seven consecutive quarters since the second quarter of 2022.
The uptick was particularly notable among projects launched in 2022-23, attributed to higher costs stemming from rising prices of construction materials, according to the centre.
The area with the largest increase for single detached houses covered the districts of Bang Phli-Bang Bo-Bang Sao Thong in Samut Prakan for unit prices ranging from 5.01-7.5 million baht.
Second were the districts of Lam Luk Ka, Khlong Luang, Thanyaburi and Nong Sua in Pathum Thani in the 3.01–5 million baht range, followed by the districts of Muang, Lat Lum Kaew and Sam Kok in Pathum Thani for units priced more than 10 million baht.
The year-on-year increase in the price index for townhouses in these provinces was higher than the gain for single detached houses, rising 4.1% to 133.8, recovering from a year-on-year decline in the fourth quarter of 2023.
The area with the largest increase in the townhouse category was Bang Phli-Bang Bo-Bang Sao Thong for unit prices ranging from 2.01-3 million baht, followed by Lam Luk Ka-Khlong Luang-Thanyaburi-Nong Sua, also within the same price range.
The price index of condos followed a similar trend to that of low-rise houses, with the largest year-on-year increase in neighbouring provinces comprising Samut Prakan and Nonthaburi, rising by 1.2% to 143.2, noted the REIC.
The area with the largest price increase for condos was the Muang and Pak Kret districts of Nonthaburi in the 2.01-3-million-baht range, followed by Bang Phli-Bang Bo-Bang Sao Thong with unit prices ranging from 1.5-2 million baht.
In Bangkok, the condo price index rose 0.01% year-on-year to 157.7, with the largest increase in the Huai Khwang-Chatuchak-Din Daeng districts for units priced between 3.01-5 million baht.
Second was the Thon Buri area within the same price range, while third was the Bang Sue-Dusit district for units priced between 5.01-7 million baht.
"An improved economy can help enhance housing affordability and increase access to mortgages as housing prices rise," said Mr Vichai.