Amid tight mortgage lending, more opt to build or renovate homes

Banks are tightening mortgage lending, making it harder to buy a house. As a result, buyers are changing strategies and opting to build or renovate homes, especially in rural areas, the suburbs, and the outskirts of Bangkok. 

Most set a construction budget of no more than 3 million baht, while renovation costs come from savings, typically between 110,000 to 300,000 baht.

This trend aligns with a survey by SCB EIC, which indicates that self-built homes priced over 3 million baht are attracting interest from those planning to build, primarily middle-income earners. 

This is happening amid sluggish demand for homes from middle-income earners, rising home prices, and space limitations in housing projects. Additionally, there is a growing need to extend or improve living spaces in the future.

As a result, those with their own land are increasingly interested in building homes rather than buying in housing developments, particularly in rural areas, the suburbs, and the outskirts of Bangkok, where commuting to the city centre is convenient. 

While most self-builders still budget under 3 million baht, the proportion of those setting higher budgets has increased compared with last year. Those earning less than 50,000 baht per month still seek construction loans and are likely to take more than 30 years to repay.

Home renovations and repairs are mostly due to wear and tear over time, reflecting necessary spending amid economic pressures such as high debt and expenses. Most who plan to renovate set budgets between 110,000 to 300,000 baht, primarily using savings for general repairs. 

However, those planning renovations that go beyond basic needs set budgets exceeding 300,000 baht. This reflects a segment of the market capable of spending on home improvements, potentially boosting the renovation market. 

Nevertheless, economic factors like high living costs, household debt, and interest rates will pressure those with renovation budgets over 100,000 baht to reduce their spending. 

Consumers consider the credibility of contractors, pricing, value for money, and comprehensive services when choosing builders and purchasing materials.

Home Building Companies/Contractors: Most individuals planning to build their own homes are interested in companies or contractors that offer comprehensive services, from structural work to interior design. They primarily seek contractors through personal recommendations from acquaintances and those with direct experience. The next most popular method is searching through the websites of home building companies, a channel increasingly favoured across various age groups.

Construction Material Stores: Those planning to build, renovate, or extend their homes mainly purchase construction materials from stores with nationwide branches. They consider the variety of products available and the reliability of the suppliers, usually opting for large, well-known stores. Special construction materials that are energy-saving, health-friendly, and environmentally friendly attract consumer interest, with many willing to pay up to 5% more for such materials.

Additionally, the high prices of construction materials have led many to delay their building or renovation projects, opting to change decorative materials to stay within budget.

Interest in installing smart home systems is rising, corresponding with the value of home construction. Among those interested, security systems are the top priority, reflecting a strong emphasis on the safety of life and property.

Home Building Companies/Construction Contractors and Renovation Specialists: Setting competitive prices, understanding customer needs and limitations, and finding solutions that meet customer demands will enhance competitiveness. However, it's essential to manage costs efficiently to maintain profit margins and liquidity. Delivering projects on time and with quality will build credibility and increase the chances of securing future projects.

Construction Material Stores: In addition to offering a wide variety of products and running promotions, businesses need to prioritise after-sales services, especially delivery and installation. These services significantly influence purchasing decisions for construction materials. Providing flexible delivery and installation services according to customer needs can offer comprehensive convenience to customers.