_Bangkok Luxury House Market 2H 2022

In the second half of 2022, 3,805 new units of the low-rise houses priced at 10 million baht or more were available for sale, an increase of 303.5 percent compared to the first half of the year. The figure is the highest number of new units for sale compared to all previous years (since 2014). Additionally, it was found that the cumulative supply during the second half of 2022 stood at 24,602 units.

The most newly launched supply was still houses price between 10-20 million baht, accounting for 76 percent, followed by houses price between 21-30 million baht and over 50 million baht at 12 percent and 7 percent, respectively. As the banks became more stringent in lending, loans for low-price housing were highly rejected. Thus, developers shifted to launch more high-end projects as they foresaw an opportunity to expand the market with positive operating results. 

Outlook

Throughout the year, the high-end housing market grew both in terms of supply and demand and able to gain confidence in developers’ revenue recognition. The shift towards the high-end segment was due to the fact that houses priced less than 10 million had a relatively high credit rejection rate, and most importantly, the purchasing power of this group of buyers was not strong because their income were still recovering from previous economic problems. On the other hand, high-end homeowners had no problems with credit rejection even during economic downturns. Furthermore, developers were confident in this group of customers because they were mainly investors and real residents, whose potential to default on down payments was almost impossible, as it required a high amount of money for reservation and contract signing, and some of them chose to buy in cash.

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