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Monday, June 17, 2024

Residential Construction Permits Plunge Amid Weak Demand

Nationwide Residential Construction Slumps Amid Weak Demand in Early 2024

The residential construction area permitted across the nation in the first quarter of 2024 is projected to hit its lowest level in three years, indicating a significant slowdown in new residential developments due to diminished demand.

The Real Estate Information Center (REIC), led by Acting Director-General Vichai Viratkapan, attributes this decline to developers’ growing concerns over poor market sentiment, which has made them cautious about launching new projects and making substantial investments.

“Developers have been experiencing decreases in housing sales and transfers for several quarters, largely due to reduced purchasing power and weak demand,” said Viratkapan. “A major contributing factor is the difficulty homebuyers face in securing mortgages.”

According to REIC, the number of residential transfers has seen consecutive year-on-year declines: 0.8% in Q1 2023, 4.4% in Q2 2023, 6.9% in Q3 2023, 12.7% in Q4 2023, and a further 13.8% in Q1 2024.

The first quarter of 2024 recorded a total of 72,954 residential transfers nationwide, marking the lowest figure in 25 quarters.

In attendance at the announcement were various officials and stakeholders from the real estate sector, who discussed the implications of these trends and potential strategies to address the challenges facing the market.

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