Mr Vichai chose to be acting director-general of REIC without taking a salary from REIC, while maintaining his position at GHB.

The Real Estate Information Center (REIC) continues to serve as an alert system for the property sector, but significant progress is needed, particularly in securing cooperation from various agencies to provide data for both the public and private sectors.

Vichai Viratkapan, acting director-general of REIC, said that over the past 20 years REIC has successfully fulfilled its role as an alert system for the property sector, as envisioned on its inception.

"REIC still has many goals to achieve," he said. "As a centre, we require collaboration from various agencies, especially the government sector, to provide us with data. This will ensure our alerts and warnings are timely, enabling faster problem prevention."

POST-CRISIS RESPONSE

After the 1997 financial crisis, which severely impacted Thailand's real estate sector, stakeholders recognised the need for a national real estate information centre to serve as a data repository and prevent future crises.

At the time, the World Bank surveyed agencies collecting real estate data in Thailand and recommended that Government Housing Bank (GHB) study the establishment of such a centre, given GHB's experience in housing data collection and dissemination.

In 2000, GHB sought financial assistance from the World Bank's Financial Sector Implementation Assistance Loan to implement the project after approving the report titled "Upgrading the National Information System for the Property Market".

REIC was established in August 2004 as an independent agency under GHB. It began collecting data across seven property categories: residential, office, shopping centres, hotels and resorts, industrial estates, golf courses, and land banks.

It also conducted field surveys to develop new databases, including residential projects available for sale, office buildings, apartments and serviced apartments, suspended large-scale projects, non-performing property loans and property regulations.

"The absence of real estate information was one of the main causes of the 1997 crisis," said Mr Vichai. "Developers rushed to launch new projects, overinvested and heavily borrowed to fund their developments, mistaking speculative buying for genuine demand."

DATA COLLECTION GOAL

Data collection is one of the two key missions that REIC needs to accomplish to ensure it has accurate, reliable and timely databases for developers to make informed decisions and avoid future pitfalls.

Initially, data was primarily collected from the Lands Department, the Bangkok Metropolitan Administration (BMA), the National Statistical Office and the Bank of Thailand.

This data includes residential registrations and transfers, condo and land registrations, land allocation permits, residential construction permits, newly released home loans, project loans, refinancing and land appraisal prices.

"Data collection from multiple agencies is not easy. We need to clean the data and use our experience to identify unusual figures and verify them as some data might be missing," Mr Vichai said.

In addition to upstream data collected from agencies issuing permits, REIC expanded its data collection to include downstream data through field surveys, particularly for the residential market.

This data includes newly launched residential supply, newly sold residential units, monthly sales rates and unsold units available for sale, both in terms of number and value.

Initially, REIC planned to obtain all this data directly from developers by having them input their information into an application.

However, due to a lack of cooperation from developers, REIC had to conduct field surveys on its own.

MORE DATA NEEDED

REIC developed various indexes, including the price index for vacant land, residential units, construction materials and home construction; the housing developers' sentiment index; and the recently introduced housing purchase confidence index.

It also developed a programme to install a computer network system to connect data on land allocation permits, registered condo projects and property transfer registrations to the Department of Lands.

"We aim to evolve into a comprehensive real estate data warehouse, serving as a centralised repository for all collected data," Mr Vichai said. "However, we still lack some information."

To make the information more comprehensive, some data should be added, provided or properly categorised.

For example, the BMA or local administrative organisations should provide the number of projects or units that apply for construction permits, rather than just the number of permits issued.

They should also monitor projects permitted for construction to determine their completion status, which will reveal the actual supply situation. When supply becomes excessive, developers can pause new launches.

Mr Vichai also suggested that the Lands Office nationwide should categorise new and second-hand housing units separately when registering residential properties.

This data will enhance the existing second-hand home database, which is currently collected from asset management corporations in the private and public sectors, as well as financial institutions and property brokerage firms.

"The existing data provides a rough estimate of second-hand homes available for sale, while data from the Lands Office reflects actual transactions," Mr Vichai said.

At present, REIC estimates the number of second-hand home transfers from the total number of housing transfers, based on the assumption that units transferred from individuals are likely second-hand homes, while those transferred from companies are considered new units.

DATA-DRIVEN ALERT

Analysis and interpretation of real estate information can help to not only evaluate the situation and predict trends, but also serve as a warning indicator, said Mr Vichai, who has been with REIC since late 2016.

"The clear benefit of real estate information was evident in 2019 when we predicted that revoking the loan-to-value easing would dampen the market," he said. "We recommended delaying the revocation to allow the market to stabilise and grow at a sustainable pace."

However, the easing was revoked, which led to a slowdown in the market in the first half of 2019, before it was further impacted by the pandemic a year later.

After increasing the frequency of residential surveys in key provinces, particularly Greater Bangkok and the three eastern provinces since 2022, to a quarterly basis from a half-year interval, the alert system has shown clear and timely results in response to the situation.

"We signalled that the condo supply launched in Greater Bangkok and Chon Buri was excessive, and as a result, developers paused new launches," Mr Vichai said.

The impact of this warning became evident later as the new supply decreased. The existing inventory was reduced and sold, with no new supply added.

COPING WITH HOT ISSUES

"One of our significant actions was in 2017 when concerns about a property bubble arose," Mr Vichai recalled. "The term 'property bubble' stirred negative sentiment in the market, even though no actual bubbles existed."

It was REIC's role to clarify the situation and explain it to relevant agencies by presenting related information such as a price index, housing registrations and transfers, absorption rates and new supply launches.

"The definition of a property bubble is a rapid change in prices regardless of the price base," Mr Vichai said.

"In 2017, the situation involved very robust sales in the residential market following the recovery from the 2011 floods, but there were no property bubbles."

Recently, REIC was asked by the House of Representatives whether there was any information about locations with condo projects where the foreign ownership quota has reached 49%, following the government's plan to increase the foreign ownership limit for condos to 75%.

"What we have is only the number, value and proportion of condo transfers by foreigners over specific periods, by month or quarter, not cumulative updated amounts in each district or project that could truly indicate popular zones among foreigners," Mr Vichai said.

He added that having detailed information would enable a more precise extension of the foreign ownership limit for condos, ensuring it targets the right areas and protects Thai buyers from affordability issues.

CHALLENGES AHEAD

Besides cooperation from data owners in both the public and private sectors, manpower and budget constraints are additional challenges that REIC is addressing.

"Since its establishment, our staff has increased from 20 to just 35, despite a quota of 43," Mr Vichai said. "We struggle to attract talent due to less competitive employment benefits."

As an independent agency under GHB, REIC staff receive less attractive benefits compared to those at the bank, particularly due to the lack of provident funds.

Feeling insecure, several well-trained REIC staff members have resigned for new jobs.

This situation is partly why Mr Vichai chose to be acting director-general of REIC without taking a salary from REIC, while maintaining his position at GHB, where he now serves as the bank's inspector.

His decision to work with REIC while keeping his position, salary and benefits at GHB stems from the fact that becoming REIC's director-general would require him to resign from the bank.

The benefits associated with his bank position, which he would forfeit upon resignation, cannot be reclaimed after retirement.

"At REIC, we have only five analysts, but we actually need 10," he said. "Moreover, they are underpaid compared to their counterparts at other information or research centres, due to our limited budget."

Each year, the budget allocated to REIC is around 90 million baht for expenses, excluding office rent, as its office at GHB headquarters is free of charge.

A proper budget to cover actual expenses and enable REIC to function as an efficient independent information centre for the real estate sector is estimated at 300-400 million baht.

After Mr Vichai's retirement in September 2024, REIC will depend on the bank's board of directors to decide whether it will remain as it is and recruit a new director-general or be integrated as a unit of the bank.

"A good alert system should signal before a problem occurs," he said.

"To achieve this and assist the government in monitoring the property sector, the next stage of REIC is to expand information coverage across all categories and conduct deeper analytics. This requires more comprehensive data than we currently have."