As for the recent news in various media outlets, prices of housing in the Bangkok Metropolitan Region have increased due to a 4% increase in construction materials, as well as land prices and labor costs, Dr. Sopon confirmed that this is false news and may just be a way to create a trend for people to rush to buy houses.

 

Dr. Sopon Pornchokchai, President, Agency for Real Estate Affairs (www.area.co.th) which is the largest real estate information centre in Thailand, presents the truth that according to the construction cost data of the Thai Appraisal & Estate Agents Foundation in the third quarter of 2024 compared to the end of 2023, construction prices increased by only 0.5%. This was because labor costs increased slightly (labor costs are a small part of the cost of construction), but overall construction material costs decreased by 0.05%. Since 2021, overall construction costs have increased by less than 1% per year.

 

In the case of wages, the minimum wage for 2020-2021 was adjusted to 313 - 336 baht (USD 9.88) per day, depending on the area. The minimum wage for 2022-2023 increased to 323 - 354 baht (USD 10.4) per day. And the minimum wage for 2024, there was a significant adjustment of wages, with an adjustment to 330 - 400 baht (USD 11.8) per day. This shows that in the past several years, there has been almost no significant adjustment.  Actually, minimum wage for construction workers is much higher than minimum way.  Therefore, wages are not a major factor for house price increase.  In addition, land prices in Bangkok and its vicinity will increase by approximately 5% during 2023-2024, which is not much and does not result in a significant increase in house prices.

 

However, the price of newly launched housing in Bangkok in 2024 has an average price of 6.733 million baht (USD 198,029), while in 2023 the average price is 5.513 million baht (USD 162,147), equivalent to the price of newly launched housing, an increase of 22%. But this is because cheap housing products have limited demand.  People at the middle- to low-income income groups could not afford to buy houses. Land developers therefore focus on building higher-priced products for high-income homebuyers who have not been affected by the economic downturn.

 

Changes in the prices of residential properties offered for sale in each period in Bangkok
Price changes	Mid-2023	End of 2023	Mid-2024	End of 2024
more	12%	12%	9%	8%
reduce	11%	9%	9%	10%
Constant	76%	79%	82%	82%
Total average	0.02%	-0.03%	-0.24%	-0.19%
Source: Agency for Real Estate Affairs, February 2025

 

In the case of housing sold in the first half of 2024 compared to those still sold in the second half of 2024, 8% of them increased in price, 10% decreased in price and 82% remained unchanged. On the average, the prices offered for the same products compared to the two periods decreased by an average of approximately 0.19%  Actually, prices began to decrease from the second half of 2023.

 

Change in the price of residential properties aged 33 years (1991-2024) in the last 1 year
Low-priced condominiums	-2.70%
Mid-priced condominiums	-3.70%
High-priced condominiums	-2.50%
Low-priced townhouses	-2.60%
Mid-priced townhouses	-3.10%
Mid-rpiced detached houses	-3.50%
High-priced detached houses	-2.40%
Average	-2.90%
Source: Agency for Real Estate Affairs, February 2025

 

Considering the price change of housing built over the past 33 years, in the latest year, prices fell by an average of -2.9%  The product that fell the most was the mid-priced condominiums (down 3.7%), while the product that fell the least was the high-priced detached houses, down only -2.4%.  However in the case of housing recently built within the past 3-5 years, prices are still somewhat stable.

 

Dr. Sopon predicts that the price of newly launched housing will continue to increase because they focus on developing high-priced products rather than lower-priced products. As for houses that have been built for some 30 years, depreciation must be considered. However, proper maintenance might help maintain the value. For second handed house for sale, if there is limited new supply, the prices of them may increase.  

Moreover, if the economy expands, the demand for housing will increase, and the price will increase as well. Dr. Sopon observes that trying to say that the prices of houses are increasing is part of the propaganda to scare home buyer so that they will rush to buy houses. Is this to help land developers? This is something that might be considered as well.

 

Consuming information from various media that are presented to investors, home buyers, land developers, and relevant government agencies should be mindful.