Property developers have called for the new government to be formed as soon as possible as it would facilitate a speedy economic recovery and ultimately stimulate the housing property sector amid several negative factors and risks.
Apichart Chutrakul, chairman of Sansiri, said the situation regarding the Russia-Ukraine war remained uncertain at present, posing risks to the global economy.
"The sooner a new government is formed, the better it will be," he said. "The property sector relies on the economy and follows economic growth because home purchasing power depends on GDP. If the economy is good, the property market will grow."
He said Thai economy had not slowed down too much when compared to other countries. The country's GDP continues to grow, although it was not as high as 5%.
Pornarit Chounchaisit, president of the Thai Real Estate Association, said the global situation overall would continue to be poor, with several negative factors. This would make it difficult for many people to obtain home loans.
"Home loan rejections remained high, especially for units priced below 1.5 million baht," he said. "Now, the problem has extended to units priced at 3 million baht, even for buyers who have obtained pre-approval, due to rising interest rates."
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the rise in interest rates was the key negative factor affecting housing developers' confidence as it had a significant impact on development costs.
"Developers' confidence in development costs was the lowest among other issues, both for the current situation and in the next six months, as interest rates were raised on May 31, 2023 for the third time in the first five months of the year," he said.
According to REIC, the current situation index of residential developers on development costs stood at 37.4 in the second quarter of 2023, slightly improving upon the 36.7 recorded in the first quarter.
At the same time, the expectations index, representing developers' sentiment over the next six months on development costs was the lowest among other issues at 32.3, down from 34.8 in the first quarter.
The expectations indices on other issues, including developers' performance, sales, investment, employment, and the launch of a new project or phase, were all above 60.0, standing at 69.4, 69.7, 68.8, 62.1 and 70.5, respectively.
However, only two topics in the current situation index were above 50.0, including investment and employment, recorded at 55.8 and 53.3, respectively. They were followed by the launch of a new project or phase (47.7), sales (46.0), and performance (44.8).
REIC reported that the current situation index of residential developers in Greater Bangkok in the second quarter of 2023 rose slightly to 47.5 from 46.7 in the first quarter but declined from 49.8 recorded in the second quarter of last year.
The expectations index also improved to 62.1 from 61.4 in the first quarter of 2023 and 56.6 in the second quarter of 2022. The highest was developers' confidence in launching a new project or phase at 70.5, followed by sales at 69.7 and performance at 69.4.
The index also suggested listed developers had more confidence than non-listed ones at 52.1 versus 40.6, said Mr Vichai.