Looking at the house building business in 2023, the zones around the perimeter of Bangkok, the low price of 2 million baht, all extinct, "Prime HBA" indicated that the main market built 5 million per house.
Journalists reported that the situation with COVID and the interannual war led to a constant slowdown in the economy as a whole. The last is the turn of business circles to build houses on their own land.
While it is no longer possible to build a house in the capital Bangkok for no more than 2 million baht. Or we can say that the construction of houses with a low price of 2 million baht has already died out in the Bangkok zone. Considering the average cost of building a house from 20,000 baht /sq.m. To build a house with the smallest size, starting from 120-150 square meters, to make a developer's house costs from 2.4-3 million baht.
Mueang Krung Sang 5 million zone
Mr. Oran Chanphu, President of the Association of Housebuilders (HBA-Association of Housebuilders), reported that Prachachart Turakiy said that in 2023, the atmosphere in the housing sector tends to improve compared to the COVID era. But this has seriously affected the cost of building houses, which has increased in all respects, including embankment, pile driving and basic building materials. and finishing products Wages are rising in contrast to labor shortage problems, etc.
Every problem costs more. As a result, most of the construction of houses in the Bangkok area around the perimeter will move to a group with a price of more than 5 million baht or more. The price group below 5 million baht still exists. But to accept the work of a house-building company will be less.
"The pattern in Bangkok is the area around the perimeter Because most of the house construction projects are designed and supplemented with details. In particular, homeowners pay more attention to the specification of building materials. As a result, the total cost and price will rise to 5 million per house.
While the low 5 million homes are already rarely built. But there are many companies that produce mass products that can build houses for 2-4 million baht. The house model is a standard type of house. Therefore, it can be built on a narrow site or a small area".
Q2/23 price increase by 5-10%
Mr. Oran said that the Association recently held an exhibition of builders and materials for the house on March 8-12, 2023 at Impact Muang Thong Thani, Chaengwattana, highlighting the pricing of residential construction, the initial price of 2022 to the first quarter of 2023. Starting in the second quarter of 2023, prices are expected to gradually increase by an average of 5-10% to reflect real costs.
However, the overall picture of the housing construction market is divided into large markets in Bangkok around the perimeter. During the COVID situation, it was discovered that a large house of 400 square meters at a price of 10-20 million baht per house is very strong because consumers are a group with high purchasing power and consider this as a negotiation period and get a good option for building a house with a market share of 25-30%.
As for the provincial market, it was found that orders for the construction of houses in the group with a price of no more than 5 million baht were the most popular Art Nouveau houses but it occupies no more than 20% of the market.
For the trend of house style in the Covid era, Mr. Oran said that changes are constantly happening. One point that is clearly visible is the growing demand for parking spaces. In the last 10-20 years, only 1 parking lot was needed, later it was added to 2 parking lots. The latest trend this year requires 3 parking lots.
Including those wishing to add a room for the elderly, the office downstairs supports the way of working at home or WFH with the most important issue in this era. It is also necessary to install an outlet in the house for charging an electric car or electric vehicle.
Ms. Pornrat Manirattanaporn, Assistant Managing Director and Sales Director of Landy Home (Thailand) Co., Ltd., added that the cost of building a house is clearly a factor that is putting pressure on doing business this year. As for the Handy Home, the average cost per square meter is 2 000 -3 500 baht per square meter.
In the Bangkok area, the construction of houses for less than 2 million baht should no longer exist. Even the business plan for this year Handy Home emphasizes the strategy of designing houses in a minimalist style, focusing on the first customers-wholesalers. The lowest price we currently do is 3 million.
"After the COVID era, the cost of everything has increased. If we don't correct anything, it will continue to grow. Labor costs increase by 10%, material costs increase by 10%.It is necessary to look at the adjustment of the usable space or at what functions make customers feel that they are getting the same function of the big back. We must work with a large number of business partners".
The average for each market is 1 800 -3 000/sq.m.
Mr. Souti Ketsiri, Managing Director of Built-to-Build Group Co., Ltd., said that the group built for construction, Bangkok house builders, small house builders in the COVID era. In 2020, the total income from house construction was 700 million baht, compared to 2022, the income ended at 1 100 million baht, an increase of 40%.
The company's strategy to reach target customers in all segments is divided into the mass market by small house builders building houses at a price of 2–8-million-baht, Bangkok house builders building at 8-20 million baht each, and houses built for construction, at a cost of 20 million baht each, a million baht or more.
"The Small House Builder subsidiary is considered to be growing. But talk about growth rates and building a big house to grow better in this era. Especially the price group from 8 million baht and above.
While the smallest house we have made has the lowest cost, averaging 18 000 baht per square meter, the smallest house is 119 square meters, the price starts at 2.14 million baht.
Mr. Souti also mentioned the adjustment of house construction prices. The COVID situation is having an impact, as a result of which the cost of construction continues to rise. Combined with the Russian-Ukrainian war, oil prices have risen, cement, wood products, tiles, plumbing and labor have increased. the cost of which is not stable.
The company calculated that a 3-5% price adjustment is not possible, so one day it increased by 7%, but this is a price that customers can accept.
Currently, the Small House Builder company, which enters the mass market, prices for building a house start from 18,000 baht/square meter, Bangkok house builders — from 22,000 baht, and "Build-to-Build" — from 30,000 baht/square meter.