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SATURDAY, June 10, 2023
High construction costs, shortage of labour to push property prices up by 3-5%

High construction costs, shortage of labour to push property prices up by 3-5%

SATURDAY, January 15, 2022

Property developers expect to hike their prices by 3 to 5 per cent this year due to rising construction costs and a restoration of balance in the property market.

Apa Ataboonwongse, chief executive officer at Richy Place, said on Friday that now that some of the properties in stock since 2020 have moved, developers will need to adjust their prices to reflect the cost of construction, which has been rising since last year.

“In 2022, we expect to see property prices go up by 3-5 per cent,” she said. “Developers cannot maintain the same prices despite management cost having reduced over the past year.

“Also, due to Covid-19, most migrant workers have returned to their countries, causing labour shortage. This, in turn, has spiked the manpower cost and delayed most projects by 10 to 20 per cent from their previous schedules,” she added.

Uthai Uthaisangsuk, chief operating officer at property developer Sansiri, said that currently demand and supply in the property market are in a balanced position.

“Sansiri has less than 10 billion baht worth of unsold condominiums and some 2 billion baht worth of unsold houses, which means there is no need for developers to engage in price wars to get rid of stock,” he said. “Instead, this year we will focus on improving after-sales service and improve the quality of the product to attract more customers.”

Meanwhile, Wichai Wiratkaphan, acting director of Government Housing Bank’s Real Estate Information Centre, said the centre estimates that property prices in 2022 will surge due to an increase in the cost of construction materials, though the price of land will likely stay the same.

“This year we also expect to see developers rolling out fewer discounts and promotional campaigns as the demand in the property sector is starting to rise and is matching the supply,” he said.