The government’s ambitious “Homes for Thais” scheme, launched with much fanfare, is unlikely to disrupt the broader real-estate market significantly, according to industry experts.
Despite a massive initial surge in interest, with more than 20 million people registering for the programme, leading developers and analysts believe that the scheme’s target market is distinct from that of the private sector.
Surachet Kongcheep, head of research at Cushman & Wakefield, said that while the government aims to build 150,000 units under the scheme, the impact on the private sector will be limited.
“The target market for these government-backed homes is primarily low-income earners who may not qualify for traditional mortgages,” he explained. “These individuals often have lower monthly incomes, and the government-subsidised homes are designed to cater to their specific needs.”
In contrast, the private sector primarily focuses on middle-to-high-income earners seeking homes in prime locations.
“While there may be some overlap in the lower end of the market, the majority of buyers in the private sector can afford higher monthly payments and are looking for more amenities and premium locations,” Surachet said.
Prasert Taedullayasatit, president of the Thai Condominium Association, echoed this sentiment.
He emphasised that the “Homes for Thais” scheme offers a unique opportunity for low-income individuals to access affordable housing through long-term leases. This, he argued, complements rather than competes with the private sector, which typically focuses on freehold properties.
Apisit Soonthronchukiat, chief executive officer of Origin Vertical Corporation, suggested that the scheme could have a modest impact on the mass-market segment, particularly in areas with affordable housing options.
However, he noted that factors like location, amenities, and lifestyle preferences continue to be significant drivers of homebuyers’ decisions.
While the “Homes for Thais” scheme is a significant government initiative aimed at addressing the housing needs of low-income earners, experts believe that it is unlikely to have a major disruptive effect on the overall real-estate market.
The distinct target markets and varying levels of affordability mean that the private sector and the government-backed scheme can co-exist without significant competition.