Thailand: Developers seek higher home ceiling price

The ceiling price of homes under the government’s mortgage loan scheme should be higher to help both local homebuyers and the property market in eastern provinces, while foreign ownership quotas for condos should be raised to boost demand from overseas.

Meesak Chunharuckchot, president of the Chonburi Real Estate Association, said the ceiling price of 1.2 million baht for homes entitled to the Government Housing Bank’s low-interest-rate mortgages under the stimulus scheme of 1-million-units was too low.

“In the EEC, there are no houses priced 1.2 million baht or lower. Most of them are between 1.5 and 1.8 million baht. The ceiling price of the scheme should be 1.8 million baht,” he said.

Property incentives, such as a deduction of transfer and mortgage fees from 2% and 1% to 0.01% each for a residential unit priced no more than 3 million baht, should also be revised to no more than 5 million baht.

The higher ceiling prices of both schemes can help homebuyers reduce expenses from loan interest and fees and help absorb existing supply.

Special business tax for property transactions should be cut to 0.1% of property value from 3.3% to help developers during the pandemic crisis.

“Stricter mortgage lending rules of financial institutions should be relaxed as they currently have a strong impact on homebuyers and send the economy into a deep contraction,” he said.

He also suggested the government provide Covid-19 antigen test kits at cheap prices to isolate infected workers earlier and let construction sites continue their work.

“Despite an overall property slowdown, some projects in some price ranges record good sales rates. There should be no more shutdowns at construction worker camps as frozen construction jobs will have a strong impact.”

To avoid a labour shortage, some rules for foreign worker provision should be amended, such as inconsistent social security rules, work permits and some forbidden occupations as a lot of foreign workers went back to their home countries and might not come back.

In the future, the property market in EEC provinces might not be robust like in the past because some industrial exports shrank.

“Foreign ownership quotas for condos should be higher than 49% to boost the property market,” he said.

“We should promote a long-stay policy among foreign buyers by connecting their medical welfare with Thailand’s healthcare system so that they don’t have to spend their money while receiving services from a hospital in Thailand.”

Mr Meesak said infrastructure development in the EEC like the high-speed train linking three airports and the aerotropolis which consists of U-tapao airport and Laem Chabang port will take a long time to create an economic impact.

“It’s not until 2023 that all projects will be completed. A concrete benefit for the property sector will emerge from 2025,” he added.

Vichai Viratkapan, acting director-general of the Real Estate Information Center, said the condo market in the three eastern provinces would recover next year.

“Absorption rate improved as new supply reduced, while the sales rate was flat,” he said. “With a more balanced supply and demand, the market will gradually pick up next year.”

In the first half, overall residential market in the EEC had a sharp decrease in newly launched supply with only 5,752 units, down 17% from the same period last year, with a combined value of 14.22 billion baht, down 35%.

Source: https://www.bangkokpost.com/business/2185011/developers-seek-higher-home-ceiling-price