A raft of property market stimulus measures in Thailand could be extended beyond the end of 2022. The most notable of these was the relaxation of the loan-to-value (LTV) ratio limits which has allowed homebuyers to take out loans of up to 100 percent of the total property value for a first or second mortgage.
During a real estate event organized by Thansettakij, Finance Minister Khun Arkhom Termpittayapaisit revealed the government was discussing an extension of the property market stimulus measures which are set to expire at year’s end. The latest round of these went into effect in October 2021.
There is some skepticism about the potential effectiveness of an extension with some experts noting that buyers may opt to delay purchasing decisions since there is no longer a deadline. In that case, developers would likely launch promotions of their own to entice transfers.
“If homebuyers want to delay their decisions after an extension of incentives is announced, developers will definitely offer campaigns to nudge them to take unit transfers because they want to record revenue for the period,” Khun Surachet Kongcheep, Property DNA Co Managing Director, explained to the Bangkok Post.
Property market stimulus measures boost Chonburi housing demand
A nearly 14 percent increase in Chonburi housing demand between the fourth quarter of 2021 and the first quarter of this year was propelled almost exclusively by interest in homes priced at THB3 million or less. Demand here skyrocketed 57.2 percent quarter-on-quarter, according to the Dot Property Group Chonburi Real Estate Market.
Interestingly, this was the first time since the COVID-19 pandemic began that total inquiries for Chonburi houses with prices at THB3 million or less surpassed the THB3-5 million and THB5-10 million segments.
One reason for this surge in demand is the Bank of Thailand’s easing of the loan-to-value (LTV) ratio for mortgages which took effect at the end of 2021. It is now possible for homebuyers to borrow loans of up to 100 percent of the total property value for a first or second mortgage. The latter was a new addition to the policy designed to stimulate the real estate market.