EDITORIAL: The question being asked by anyone with even the slightest interest in the Thailand property sector is whether the government stimulus measures, announced on Tuesday, have gone far enough?
On one side you have the property developers – some with substantial unsold inventory to shift. They, naturally, are upbeat and confident the measures will entice more buyers to invest in what amounts to many billions of baht of property for sale.
Now some facts.
Thailand’s Government Housing Bank has allocated an additional THB 10 billion for this project – which in many people’s opinion will barely scratch the surface. And that’s THB 10 billion in additional mortgage liquidity that is only available for applicants who earn less than THB 30,000 per month and need a loan of no more than THB 3 million.
If all THB 10 billion is used to the full THB 3 million per applicant limit, that’s just over 3,330 loans in a market were there could be more than 150,000 new unsold properties looking for owners.
At the same time the bank said it will also be reducing its lending criteria – which some people are suggesting will both add to speculation in the market as well as increasing household debt – already a growing concern for the Thai government.
The reductions in property purchase fees – whist welcomed – amount to very little in the overall scheme of buying property. Buyers, if they qualify, will save a tiny bit less than THB 30,000 for every THB 1 million cost of their chosen property.
Tax incentives, which were also announced, are actually more beneficial to higher earners who choose to purchase property. Low-income earners would be able to save THB 12,000 per year on their tax bill whereas high-income earners can save up to THB 36,000.
In reality any help for Thailand’s property sector must be welcomed, but whether this round of measures go far enough to ease concerns of oversupply in some parts of the Kingdom, as well as increasingly difficult lending criteria from mainstream banks, is a question that may only be answered many months from now due to a lack of transparent and immediate property sales data in Thailand.
What are your thoughts? What can we expect to see? What measures would you have suggested, given the chance? Leave a comment along with this editorial or email our Group Editor to have your say. We welcome all contributions.
