Piti Tantakasem, the Director and CEO of TTB Bank (the TMBThanachart Bank Public Company Limited), delivered a speech on the theme “How will trends and conditions in the economy, in the financial market, in the capital market affect the real estate market in 2022?”. The current real estate market continues to face difficulties that reduce the demand for property purchases.
Piti Tantakasem emphasized seven main factors influencing the real estate market in Thailand.
- The Thai population structure has changed. The working-age population is shrinking, people are having children later, and the elderly population is growing. The process of "aging" of the nation is in progress. The real estate market is influenced by social processes, and older people purchasing new housing is very rare. In return, young working people focus on small apartments in condominiums near their work. The demand for large private houses for big families is decreasing. Small families prefer to live in inexpensive townhouses.
- After the pandemic, a trend to change lifestyle started among many employable people. People have got the opportunity to work from home, which means that the working space should be in the living area. People want to live in the countryside in comfortable and Eco-Friendly conditions for a cozy stay at home 24 hours a day.
- The debt problem of Thai households remains huge. Debts affect consumer purchasing power.
- In 2022, government measures help the real estate sector to stimulate domestic purchasing power. However, these measures are temporary and affect only the purchase of inexpensive real estate. As for foreign indicators, demand is only decreasing.
- Oversupply in the real estate market starts to recover in the last 3 years.
- Construction costs continue to rise.
- The growing trend in interest rates affects the real estate sector. The policy interest rate is expected to be adjusted in 2023.This will lead to a subsequent rate hike.