The sentiment index for housing developers in Greater Bangkok has reached its lowest point since the third quarter of 2020, signaling a concerning trend in the residential market. The index, which measures developer confidence, has now been below the median threshold of 50 for seven consecutive quarters, indicating a persistent decline in sentiment.
Key Takeaways
- The current sentiment index stands at 45.1, down 4.6 points year-on-year.
- Sales sentiment saw the largest decline, dropping 6.6 points to 40.7.
- The expectations index for the next six months is slightly more optimistic at 51.6.
Declining Developer Confidence
Kamonpop Veerapala, president of the Government Housing Bank and acting director-general of the Real Estate Information Center (REIC), reported that the current situation index is at 45.1, a decrease of 0.1 points from the previous quarter. This marks a significant drop from the last peak of 46.3 in the fourth quarter of 2020.
The index has been consistently below the neutral mark of 50, which indicates a lack of confidence among developers regarding the residential market’s future. The last time the index was this low was in Q3 of 2020, when it recorded 42.8 points.
Breakdown of Sentiment Components
The sentiment index is composed of various components, each reflecting different aspects of the housing market:
- Sales Sentiment: Dropped 6.6 points to 40.7.
- Investment Sentiment: Fell 0.2 points to 47.4.
- Revenue Sentiment: Increased by 2.5 points to 42.0.
- Launch Sentiment: Rose 1.6 points to 50.7.
- Development Costs: Increased by 1.5 points to 40.4.
- Employment Sentiment: Gained 0.9 points to 49.6.
Despite some increases, all components, except for launch sentiment, remain below the neutral threshold of 50, indicating ongoing challenges in the market.
Listed Developers’ Sentiment
The sentiment index for listed developers also reflects a decline, dropping to 47.9 from 52.2 in the previous quarter. This decline suggests that publicly traded firms are experiencing heightened concerns about the current market conditions.
Key changes in the listed developers’ sentiment include:
- Sales Sentiment: Decreased by 15.8 points to 43.8.
- Investment and New Project Launches: Both fell by 5.6 points to 52.1.
- Revenue: Dropped 2.3 points to 47.7.
- Development Costs: Increased by 3.1 points to 39.6.
- Employment: Slightly rose by 0.2 points to 52.1.
Future Outlook
Despite the current downturn, the expectations index for the next six months shows a slight improvement, standing at 51.6, which is above the neutral mark. This suggests that developers may have a more positive outlook for the near future.
The components contributing to this optimism include:
- Sales: Increased by 3.4 points to 57.8.
- Development Costs: Rose by 2.9 points to 37.5.
- Employment: Increased by 2.2 points to 52.4.
- Revenue: Grew by 2.0 points to 53.0.
However, two components reported declines:
- New Launches: Dropped 6.3 points to 58.1.
- Investment: Decreased by 3.1 points to 51.0.
In summary, while the current sentiment among housing developers in Greater Bangkok is at a low point, there are signs of cautious optimism for the future, particularly in sales and employment.
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