By The Nation
The Covid-19 crisis has impacted the housing market in the first quarter of 2020 not only in investments but also sale of housing but the slowing of demand and supply has balanced the market, reducing the risk of problems from excess supply, said Vichai Viratkapan, bank inspector and Real Estate Information Centre (REIC) head at Government Housing Bank.
In the first quarter of 2020, 89,024 units of ownership were transferred nationwide, down 16.7 per cent from the fourth quarter of 2019 but up 2.5 per cent year on year (YoY), with total value of Bt210 billion.
House ownership transfer in the Bangkok metropolitan area in the first quarter was 45,678 units, down 18.3 per cent quarter on quarter (QoQ) and 4.4 per cent YoY. The value of house ownership transfer was Bt129.406 billion, down 24.4 per cent QoQ and 2.7 per cent YoY.
The housing ownership transfer value in the region in the first quarter totalled 43,346 units, down 14.9 per cent QoQ but up10.9 per cent YoY. The value of ownership transfers was Bt80.888 billion, down 13.5 per cent QoQ but up 25.0 per cent YoY.
The REIC expects that by 2020 there will be 311,719 units of ownership transfers nationwide, down 16.7 per cent YoY. The total value of ownership transfer will be Bt746.206 billion, down 14.8 per cent YoY.
The Bangkok-metropolitan area will have 160,350 units of residential units, a decrease of 19.1 per cent YoY, with a total transfer value of Bt472.401 billion, down 17.4 per cent in value YoY. Total regional units will be 151,369, with the total value of transfer at Bt273.805 billion, down by 14 per cent and 9.9 per cent YoY respectively.
New individual housing loans
In the first quarter of 2020, the total value of individual housing loans was Bt138.238 billion, down 13 per cent YoY. The REIC expected that in 2020, the total number of new housing loans for individuals nationwide will be Bt571.196 billion, down by 10.8 per cent YoY.
New housing supply during the first quarter of 2020 showed that 60,165 units of residential building permits were issued nationwide, down 17.9 per cent QoQ and 27.7 per cent lower YoY. The number of residential construction permits in the Bangkok-metropolitan region was 20,590 units, a decrease of 18.6 per cent from the 4th quarter of 2019 and a decrease of 36.5 per cent compared to the same period last year. As for regional housing supply, 39,575 units of residential building permits were issued, down 27.8 per cent QoQ and 30.9 per cent lower YoY.
The REIC estimates that by 2020, 256,601 units of residential buildings permits will be issued nationwide, down 16.5 per cent YoY.
In the Bangkok-metropolitan region, there will be 97,441 units of residential building permits, down 20.7 per cent compared to last year. In the regions, it is expected that 154,160 units of residential building permits will be issued, down 22.7 per cent YoY.
According to survey data of new residential projects for sale, it was found that during the first quarter of 2020, there were 15,932 units of all types of new homes for sale in the Bangkok-metropolitan region, down by 49.3 per cent QoQ and down 29.6 per cent YoY. It is estimated that by the end of 2020, in the Bangkok-metropolitan region alone there will be 79,408 units of new housing for sale of all types, consisting of 35,734 units of newly-launched housing projects and 43,674 units of newly-opened condominiums, down 19.9 per cent YoY.
Meanwhile, the number of completed housing projects registered in the Bangkok-metropolitan region in the first quarter of 2020 also decreased with only 21,260 units registered, down 24.7 per cent QoQ and down by 12.3 per cent YoY.
It is expected that by the end of 2020 there will be approximately 80,563 units of registered completed housing units, down 27.8 per cent compared to 2019.
The direction of the housing market in 2020
The REIC expects that this year, despite the country's overall economic slowdown, the housing market will not face the severe problems it did in 1998, due to adjustment in both demand and supply.
In addition, the "New Normal" trend in the housing market points to consumers being more interested in living in a house than a condominium. But, due to their tight budget, customers have to choose housing at a price that is within their ability to pay by instalments. The REIC expects that in the last quarter, those with income stability, such as civil servants and those with regular salary, will return to buy housing.