People check out property deals on offer at a House and Condo fair held at the Queen Sirikit National Convention Center. (Photo: Varuth Hirunyatheb)

The luxury residential market is expected to remain robust over the next two years, despite economic pressures that are causing individuals in the middle-to-lower-end segments to delay their purchasing decisions.

According to SCB Economic Intelligence Center (EIC), a research unit of Siam Commercial Bank, the purchasing power of the middle-to-upper-income group is expected to recover significantly.

This segment is expected to support the housing market in 2024 and over the next two years, particularly for residential properties priced above 5 million baht.

These are primarily driven by real demand for both first and second homes.

Natha Kittiaksorn, deputy chief executive of SET-listed developer Major Development, said residential demand in the luxury segment is strong, which also attracts Japanese partners to co-invest with it.

"From our performance in the first half, we have seen no decline in demand for high-priced single detached houses," she said. "Even in the condo sector, demand is solid. Our newly launched project in the Phrom Phong area sold out in just two months."

SCB EIC surveyed the housing demand of Thais and found that recovery was still restricted due to ongoing economic pressures.

As a result, prices remained the most critical factor and the second-hand housing market continued to be highly popular.

Economic pressures included high household debts and expenses which continued to impact housing purchase decisions, particularly for those with incomes below 50,000 baht per month.

Demand for housing in the next two years is expected to decrease compared to the previous year's survey.

Most demand was still projected for the next 3-5 years, during which the economic situation and purchasing power is expected to improve, along with better financial readiness compared to now.

Nearly half of the respondents in this survey had no plans to buy a home, or might consider doing so only after the next five years.

The main reasons for not planning to buy a home within the next five years were that either that individual or their family already owned a property, or their income and expenses could not afford it.

Gen Y and Gen Z individuals with middle-to-lower incomes believed that their current earnings were insufficient to purchase a new home, so they opted to adapt and live with family instead.

Meanwhile, those whose income or expenses were currently restrictive generally believed that their financial situation would improve enough to afford a home after the next five years.

The factors of price value and affordability were the most influential in home-buying decisions.

Location has become increasingly important and is now more critical than the adequacy of living space.

Among Gen Y and Gen Z, convenience of location for travel was a key consideration and they also aimed to balance this with the adequacy of living space, according to SCB EIC.