Labour Shortage Delay Homebuilders

By | October 25, 2012

(Source: Bangkok Post, Thailand (MCT) — The homebuilding market is facing a serious scarcity of labour and rising construction material prices and wages nationwide, says the Thai Home Constructions Association (THCA).

President Sitiporn Suwanasut said activity in the self-built home market in the third quarter was not as high as in previous years despite it being a period for events and campaigns.

“Material prices and labour wages are tending to increase as the new minimum labour wage will be applied nationwide early next year,” he said.

He said some homebuilders were unable to take on new jobs because they had not completed construction of housing units they had sold under the previous costs. Some faced difficulty in management due to rising costs.

Mr Sitiporn, also president of homebuilder PD House Group, said many homebuilders faced very low profits or even losses, so they were more cautious about pricing. Many delayed construction and were unable to deliver units as scheduled because of the shortage of workers. In particular, homebuilders in Greater Bangkok needed to pay higher wages to attract and retain workers.

While the provinces have fewer homebuilders, competition in prices is higher in major provinces such as Chiang Mai and Udon Thani, where there are about 10 homebuilders, both local and Bangkok-based ones.

Mr Sitiporn said the standard of provincial homebuilders remained lower than what consumers expected, but they dominated the provinces because of the lack of competition.

In the third quarter, concerns over possible floods and the impact from the sluggish global economy slowed down demand in the self-built home market.

The association found members’ sales in the third quarter dropped 10% from the second quarter but were stable compared with the same quarter last year.

Sales value in the Central region was highest and accounted for 25% of sales, followed by the Northeast and Greater Bangkok (22% each), the North (21%) and the South (10%).

Sales were strong in Ratchaburi, Phetchaburi and Hua Hin.

The THCA estimates the overall homebuilding market’s value will be lower than 10 billion baht this year.

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©2012 the Bangkok Post (Bangkok, Thailand)

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Source: Bangkok Post, Thailand (MCT)

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