The homebuilding market will grow by 8% next year as the overall economy continues to improve, with consumers shifting away from individual contractors, says the Thai Home Builders Association (THBA).
Sitthiporn Suwannasut, the association's president, said buyers in the self-built home market will gain confidence and higher purchasing power if the government successfully boosts the economy next year.
THBA expects the self-built home market value will total 130-150 billion baht nationwide in 2018, up from 120-140 billion this year.
THBA members will have a market share of 14-15 billion baht, up from 13-14 billion, Mr Sitthiporn said.
"Growth in the homebuilding market will be driven by value per unit, which will rise in line with higher costs," he said.
"Another factor for growth will be a larger market share among homebuilding firms."
This year the economy exceeded many research houses' forecasts, estimated to have GDP growth of 3.9-4%.
Consumers and buyers in the self-built home market tend to adjust and accept economic changes, as indicated by the recovery in mortgage loan applications among self-built home buyers after a slowdown.
"This is a good sign and we expect the self-built home market will continue to expand next year under the conditions that financial institutions maintain interest rates until next year," said Mr Sitthiporn.
He said competition in the homebuilding market will remain strong.
This will put pressure on homebuilding firms, rendering them unable to raise unit prices.
Discounts are one of the most attractive campaigns being used to boost sales, as is usual practice, said Mr Sitthiporn.
The association said consumers who spent their savings to have a home built this year were largely businesspeople, professionals and executives in large firms such as physicians, engineers, financial analysts, and mid to high-level management as well as owners of small businesses.
"These buyers slowed down their purchases the past few years as they may have been affected by the sluggish economy," he said.
In the second half of 2017, the self-built home market recovered slightly when compared with the same period last year.
THBA said this was a result of pent-up demand and a sign of faith in the future of the political and economic situation.
"The expansion in tourism and exports were better than expected due to the government's economic stimulus in the form of tax deductions and injecting funds into the system. This drove people's purchasing power," said Mr Sitthiporn.
However, a recovery in the self-built home market in the fourth quarter might not reflect the revenue of homebuilders in 2017 as construction jobs and employment will not pick up until the first quarter of next year.
In the homebuilding market, expansions were in line with increases in sales in the fourth quarter.
Some homebuilders in flooded provinces saw sluggish consumer purchasing power and slower sales.
Demand in the self-built home market in provinces was also sluggish because of floods, he said.
"Consumers in provinces continued to use individual contractors as they were unable to access homebuilding firms. Most homebuilding firms stayed focused on Greater Bangkok locations," said Mr Sitthiporn.
He said people in provinces still do not comprehend or distinguish between quality and real unit price.
This means people outside of Greater Bangkok refuse to use homebuilding firms as they feel the fees charged by homebuilding firms are not justified.
Homebuilders should also apply alternative materials to replace natural materials to build houses, using energy-saving and environmentally friendly construction materials like solar cells and synthetic wood.
"Equipment for elderly people, healthcare and home automation are becoming the standard for homebuilding market in the 4.0 era," he said.
He said the 2014 coup weakened consumers in the homebuilder market.
Political uncertainty dampened purchasing power and put off decisions to build homes.
Mr Sitthiporn suggested homebuilders use online platforms such as social media to promote products as consumers prefer gathering information from the internet rather than printed media.
"Many homebuilders have shifted to online media to communicate with consumers along with setting up branches in Bangkok and the provinces," he said.
The shift to online media has THBA partnering with homebuilding firms and construction material producers and suppliers to hold the Online Home and Materials Fair 2018 for the first time.
The online event will help consumers nationwide conveniently access information from homebuilders, construction materials producers and suppliers.
Homebuilders across the country can join the online event from anywhere.
By hosting the event online, marketing costs will decrease, while reaping all the benefits of a traditional general fair.
"Amid high competition in the homebuilding market, adjustment and cost reduction is the key," Mr Sitthiporn.
"The online fair will create opportunity for homebuilders and help decrease consumer expenses while still maintaining quality."