Interest rate hikes have affected demand in the lower-end segment for residential units, resulting in a consecutive decline in transfers in the third quarter of 2023.
Vichai Viratkapan, acting director-general of the Real Estate Information Center, said the number of residential units transferred has fallen year-on-year since the first quarter of 2023, with a drop of 0.8% to 84,619 units.
"This year, interest rate hikes started in January, followed by a second rise in March, which continued to affect the housing market in the second quarter," he said. "This led to a year-on-year decline of 4.4% in the number of residential units transferred, totalling 91,085 units."
The interest rate increases persisted in the second quarter with the third time in May, the fourth in August, and the fifth in September.
Consequently, the third quarter witnessed the largest decline in the number of transfers, plummeting 7% to 94,946 units.
Mr Vichai said this year would see a year-on-year decline in each quarter, with a decrease of 2.7% forecast in the fourth quarter. It would be in stark contrast to the growth of 3.8%, 8.9%, 34.9% and 12% in the first to fourth quarters, respectively, last year.
The overall number of residential units transferred nationwide during January to September 2023 totalled 270,650 units, down by 4.2% from the same period of last year.
But the value of transfers rose by 1.6% to 766.97 billion baht, indicating that a significant portion of the transfers was in the higher-priced segment, Mr Vichai added.
In the first nine months of the year, the year-on-year drop in the unit number was seen in units priced at 3 million baht and lower.
The largest decrease was in units priced at 1 million baht and less (-8.8%), followed by 2-3 million baht (-6.6%), 1-1.5 million baht (-6.5%) and 1.5-2 million baht (-5.9%).
Units priced at 7.5-10 million baht saw the largest growth at 20.6%, followed by those priced at 10 million baht and above at 12%, 5-7.5 million baht at 7%, and 3-5 million baht at 2%.
When categorised by new units and second-hand units, the second-hand units priced between 2-3 million baht and 3-5 million baht saw a year-on-year growth of 0.1% and 16%, respectively.
For new units priced at 2-3 million baht and 3-5 million baht, they dropped 13.4% and 4.5%, respectively.
This suggested the purchasing power for homes in these price brackets decreased, leading some buyers to opt for second-hand units, which, in the same location as new units, often come with a lower price or a larger size.