Connect with us


Bargains Galore as Thailand’s Housing Market Reboots



Bargains Galore as Thailand's Housing Market Reboots

According to industry experts, Thailand’s residential housing market will slowly improve next year as a result of more balanced supply and demand as well as the easing of housing loan regulations, but it will take until 2023 for the market to fully recover to pre-pandemic levels.

Positive signs have appeared at the end of this year, and it is expected that the Thai property market will recover in 2022. Real estate prices haven’t increased much, and there is no oversupply. Kamolpat Swaengkit, Country Manager Thailand of, said at a virtual press conference on the market outlook in 2022 that developers can attract so-called “real demand” buyers who have purchasing power and long-term investors.

Though the economy appeared to be doing well, she cautioned that there were still uncertainties. “It greatly depends on the pandemic situation, especially after the introduction of the Omicron variant, and how Thailand handles it.”

“COVID-19 has affected all sectors, including the property market. In early 2021, we predicted that the sector would recover, but the market declined because of the uncertainties caused by the pandemic. Additionally, after the fierce competition and the price wars in 2020, there won’t be many buyers left,” she said.

Homebuyers can borrow up to 100% of the home’s value

Despite experiencing its worst year in a long time, the property market is set to improve in 2022. In a positive sign, the Bank of Thailand (BoT) has lowered its loan-to-value (LTV) ratio for mortgage lending so homebuyers can borrow up to 100% of the home’s value. This relaxation will last until the end of 2022.

According to Don Nakornthab, senior director of the financial stability department at BoT, the LTV (relaxation) scheme is intended to boost the supply chains in the property sector, including furniture and building materials, and also to boost the overall economy, while the economy has been affected by the pandemic. Additionally, it will maintain employment in the real estate sector and related industries, which contribute almost 10% to the GDP.

“It helps boost the property market because it encourages potential buyers to take action. Buying a home with a 100% loan is now possible. For a second home, the BoT limits the LTV ratio to 80-90%, and for the third home to 70%. The buyer can now get a 100% mortgage, although the commercial banks must approve the loans,” he said at the same virtual press conference.

Over the next year, the central bank expects residential mortgage loans to total around 50 billion baht as a result of the LTV relaxation.

Reduction of property tax and transfer fees

BoT and real estate developers are eagerly anticipating the government’s measures to boost housing supply and purchasing power, such as the reduction of property tax and transfer fees.

“The government can do this to stimulate the market. The budget does not need to be spent [on this] but revenue would be lost instead,” Don said.

Additionally, the ease will help maintain employment in the real estate sector and related industries.

As foreign buyers, especially Chinese buyers, have no plans to return any time soon, the government’s extra push is practical to boost local demand.

There is still a demand for housing, but Kamolpat said that the COVID-19 pandemic was the key factor in delaying purchases. She said the outbreak affected prospective home buyers’ cash flow and confidence.

According to DDproperty’s latest Consumer Sentiment Study, 71% of Thais still want to buy homes but have delayed their purchases and 39% plan to buy within the next 1-2 years.

A major obstacle is the loss of income during the pandemic (66%) followed by the prices of houses (63%), political uncertainty, and inability to obtain a home loan from the banks (37%). “Financial problems are still the biggest obstacle for home buyers,” she said.

According to the Agency for Real Estate Affairs, 47,500 residential units were launched on the market in 2021, the lowest number in a decade. As a result, the value of the new units is less than half of what it was before COVID-19. Bangkok’s residential market totalled 565 billion baht in 2018 with 125,118 brand-new units launched.

Housing Market in Chiang Rai

At the same time, Kaekwun Kanjanapungka (Kay), owner of Kay Estate in Chiang Rai, says the pandemic has severely reduced the number of houses being sold.

Chiang Rai had a booming housing market prior to the pandemic, with Chinese and other foreign property investors flocking to buy homes.

In Chiang Rai, many property buyers took advantage of Chiang Rai’s lower property prices, realizing the potential investment opportunities it offered.

Kay says that the Bank of Thailand (BoT) lowering its loan-to-value ratio for mortgages will help the housing market in Chiang Rai.

Kay believes many people from Bangkok will now be able to purchase a second or third home in Chiang Rai with the relaxation of the (LTV) terms and downpayment requirements.

She says Chiang Rai has fewer than 100,000 residents, ensuring an intimacy you won’t find in large cities – yet there are internationally accredited hospitals and large shopping complexes just outside the city centre.
Chiang Rai offers a complete escape from traffic congestion and a breath of fresh air. It is also relatively inexpensive.

Read:  Thailand’s Property Market Foretasted to Normalize by 2023


Continue Reading

CTN News App

CTN News App

Recent News


compras monedas fc 24

Volunteering at Soi Dog

Find a Job

Jooble jobs