Warning: Construction Materials Set to Rise in Q3 as Price Wars Threaten Business Closures

The Thai House Builders Association (THBA), through Honorary Board Member Sithiporn Suvanasut, has released a statement analyzing the house-building industry amid geopolitical crisis. The ongoing conflict in the Persian Gulf region, now lasting over two months with no signs of resolution, is having direct negative impacts on the global and Thai economies, particularly through surging energy costs and transportation fees. The association views this as a critical warning signal for Thailand's construction industry, predicting that construction material prices will face another round of increases in Q3 2025 due to global raw material shortages and manufacturers reaching production cost limits.

"This will create immense pressure on the house-building sector that cannot be avoided," the statement warns.

The association expresses serious concern about contractors pursuing aggressive "price war" strategies by cutting prices to boost sales volume without adjusting selling prices to match actual costs. Contractors who refused to raise prices in previous rounds now face a "double-whammy" cost increase—first from already-raised costs and second from material price hikes coming in Q3. "If any company lacks sufficient financial reserves or business credit strength, they will face severe losses and risk having to close down entirely," the statement cautions.

For consumers, the association recommends extreme caution when signing construction contracts, particularly when contractors request advance payment installments exceeding contract terms while claiming the need to "lock in prices" with material manufacturers—a practice that is difficult in reality and often signals liquidity problems.

The association advises consumers to select builders based on three key standards:

1. Standardized house designs with complete and clear construction blueprints 2. Construction costs based on the company's standards, with reference prices calculated from actual costs per design, not per square meter of usable space 3. Material and equipment quality standards with detailed specifications including brand, grade, and model numbers

"These three factors are crucial indicators of whether the house and price offer reasonable quality," the statement explains. "Consumers should not be swayed by claims that construction can fit any budget with quality details settled later, as this is no different from hiring unaccredited contractors with no standards to compare against, risking hidden quality reductions."

Regarding market trends in Q2-Q3 2025, the association predicts overall market contraction due to declining purchasing power from rising living costs. However, new entrants—including small real estate developers, subdivision project contractors, architects, and engineers—are flooding into the house-building business at unprecedented rates in both Bangkok and provincial areas. "With so many new players entering while demand shrinks, this will inevitably lead to fierce competition," the statement notes.