The housing market will need to rely on foreign demand to stimulate growth, as domestic buyers are facing challenges in obtaining loans, evidenced by a decline in residential transfers in the first quarter of 2023.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the market in the first quarter was not as good as many developers had estimated in the fourth quarter of last year.
"The figures in the first quarter, both in terms of supply and demand, showed negative trends," he said. "The market is expected to have a double-digit decline this year, influenced by the expiration of the easing of the loan-to-value (LTV) limits at the end of last year."
In the first quarter, the total number of housing transfers nationwide dropped 0.8% to 84,619 units from 85,320 units recorded during the same period last year.
However, there was an 8% increase in value, reaching 241 billion baht from 223 billion baht, driven primarily by units in the high-priced segments.
Housing units priced between 7.5-10 million baht had a notable increase of 34%, and those priced above 10 million baht saw a rise of 22.6%. However, units priced below 3 million baht recorded decreases, ranging from 0.2% to 11.4%.
Out of the total units and value transferred in the first quarter of 2023, 3,775 units, accounting for 4.46% and valued at 17.1 billion baht (7.1%), were purchased by foreign buyers.
All of these units were condos with an increase from 2.47% in terms of volume and 4.57% in terms of value in the same period of last year.
Among the foreign nationalities purchasing properties, Chinese nationals were the largest group, purchasing 1,747 units valued at 8.2 billion baht, representing 46% and 48% of total purchases by foreign nationals, respectively.
Russian buyers accounted for 10% with 387 units worth 1.36 billion baht, followed by American purchasers with 156 units valued at 703 million baht, accounting for 4% each.
The fourth and fifth positions were occupied by British and German buyers, with 146 units worth 653 million baht and 131 units worth 611 million baht, respectively.
Eighth place belonged to purchasers from Myanmar with 76 units worth 497 million baht.
On the supply side, the total number of newly launched residential units in Greater Bangkok decreased by 59% to 12,026 units in this year's first quarter.
These units were valued at 65.1 billion baht, reflecting a decline of 39% compared to the previous year.
The total number of land allocation permits nationwide or those for the development of low-rise houses saw a decline of 13.6% to 15,267 units.
This decrease can primarily be attributed to developers' lack of confidence in demand following the expiration of the easing of the LTV limits last year.
"At present, it is difficult to predict the market conditions for 2023, as the positive and negative factors cannot be accurately identified until the new government is established," he said.
REIC anticipates a 10.2% drop in the total number of residential transfers nationwide and a 4.5% decline in their overall value.
The forecast for the total number of newly launched residential units in Greater Bangkok is projected to be 98,132 units, valued at 505 billion baht. This represents a decline of 10.5% and 8.2%, respectively, when compared with last year.