BANGKOK, Thailand – In a bid to rejuvenate the sluggish real estate sector, Deputy Prime Minister and Minister of Finance, Phichai Chunhavajira, announced a series of housing stimulus measures during the opening of the 46th Housing and Condominium Expo. The proposed initiatives include a low-interest home repair and construction loan scheme worth 55 billion baht, aimed at assisting low-income citizens and stimulating economic growth, with a projected GDP increase of 2.7% for 2024.
Key Takeaways
- Proposed 55 billion baht low-interest loan scheme for home repairs and construction.
- Cabinet approved significant cuts to transfer and mortgage registration fees.
- New measures target both property buyers and developers to stimulate the market.
The Finance Ministry has been proactive in supporting the real estate sector through various loan programmes, including the Happy Home Loan scheme, which has already released 20 billion baht in loans, and the Happy Life Loan, providing 18 billion baht in funding. The new cabinet measures will focus on offering low-interest loans for purchasing, renovating, and constructing homes and condominiums, particularly for low-income households.
Tirachon Thanesdejsuntorn, chairman of the expo, expressed optimism that recent interest rate cuts by the Bank of Thailand would enhance consumer confidence, coinciding perfectly with the expo. The event, running from October 31 to November 3, 2023, features over 150 exhibitors showcasing more than 1,000 projects, alongside financial institutions offering special interest rates exclusively for attendees. The expo aims to generate around 20 billion baht in economic activity, providing opportunities for Thai citizens to increase their purchasing power before the year ends.
Cabinet Endorses Property Stimulus Measures
The cabinet has approved a range of property measures, including significant cuts to transfer fees and an increase in the price limit for homes and condominiums eligible for these benefits. The transfer fee will be reduced from 2% to 0.01% of the transaction value, while the mortgage registration fee will also be slashed from 1% to 0.01%.
These measures apply to residential properties with a purchase price not exceeding 7 million baht, up from the previous limit of 3 million baht. The new measures are designed to alleviate the financial burden on property buyers and stimulate the real estate sector, which contributes up to 10% of Thailand’s GDP.
Economic Impact and Future Prospects
According to Deputy Finance Minister Krisada Chinavicharana, the new property measures are expected to boost the GDP by 1.7-1.8 percentage points, with an estimated total property transaction value of about 800 billion baht and new investments ranging from 400 to 500 billion baht. The tax breaks are projected to stimulate spending by approximately 120 billion baht.
Kessara Thanyalakpark, managing director of Sena Development, noted that these measures could significantly benefit the sector and the economy in the long run. They are expected to stimulate home demand and purchasing power, particularly for potential homebuyers who may have delayed their purchases due to economic uncertainties.
In addition to the loan schemes and fee reductions, a tax deduction is being offered to individual taxpayers constructing homes, allowing a deduction for construction expenses paid to registered contractors. This initiative is part of a broader strategy to promote residential projects for low-income earners and stimulate the housing market.
As Thailand navigates through economic challenges, these housing stimulus measures represent a concerted effort by the government to revitalise the real estate sector and support its citizens in achieving home ownership.
Sources
- Housing stimulus measures proposed to revitalize sluggish real estate sector – Pattaya Mail, Pattaya Mail.
- Bangkok Post – Cabinet endorses property stimulus, Bangkok Post.
- Bangkok Post – Thailand plans $1.7bn of soft loans for property sector, Bangkok Post.
