House prices may rise by 10 percent next year and house purchasing power will fall when the minimum daily wage is raised to 300 baht, project developers think. But this year there is nothing wrong with the housing market, because it is rising by 10 percent to 300 billion baht or 10.000 units.
According to Thongma Vijitpongpun, director of listed property developer Pruksa Real Estate Plc (PS), wage increases in the second half of the year will pose a risk to housing trade and lead to higher prices next year as labor and material costs rise .
Prasert Taedullayasatit, chief business officer of PS, says condominiums in particular have been hit hard by the wage increase because condos are priced at launch regardless of whether construction costs increase later. This is in contrast to townhouses and detached houses, the price of which can be adjusted according to costs.
'We have an emergency provision of 2 percent to absorb possible and unforeseeable increases in construction costs. That is better than allowing the subcontractors to leave the construction site,' he says.
Pheu's plan will also have an impact on the housing market ภาษาไทย to promote mortgages that are interest-free for the first five years. Buyers could postpone their purchase until the plan is realized, but no one knows when that will be.
'This policy must be implemented as soon as possible or potential home buyers will stick to their decision. We will monitor the situation when the policy decision is announced but has not yet entered into force. Maybe we'll launch a campaign to speed things up.'
The fact that because of that wage increase the prices have to rise is rubbish. It is a fact that most of those construction companies are not paying the minimum wage even now, let alone paying 300 baht for their workers in the future. Furthermore, it should also be taken into account that this minimum wage does not count for foreign workers, who make up a significant part of the mass of workers in construction.
Foreign employee? Can they work there?
There is an entire army of Burmese and Laotians working there, legally or illegally
Don't forget the Cambodians. I thought they are the largest group of foreign workers, legal or illegal. The number of legal foreign workers is 1 million; the number of illegal immigrants mentioned in the newspaper varies: sometimes 1 million, sometimes (much) more.
You can also see more and more Burmese at work in restaurants, garden centers and resorts. That will increase even more as wages go up.
But I think the Thai will get out of it, they are so resourceful.