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Govt’s property stimulus measure not having much effect: REIC

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The reduction of property transfer and mortgage fees has not helped stimulate all sectors of the housing market, the Government Housing Bank’s Real-Estate Information Centre (REIC) said.

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In 2019, the government tried to boost the real-estate business by lowering property transfer fees from 2 per cent to 0.01 per cent and mortgage fees from 1 per cent to 0.01 per cent for properties costing no more than Bt3 million. This campaign will run until the end of 2021.

“This measure does not benefit consumers who can afford condominiums in the Bt3 million-Bt7 million range, and houses in the Bt5 million-Bt7 million. These consumers account for 80 per cent of the market,” Wichai Viratakaphan, REIC’s acting director-general, said.

“The government needs to expand the measure so consumers eyeing properties worth more than Bt3 million will be tempted to buy,” he said.

“As for those who can only afford properties below Bt3 million, they are still unable to get housing loans due to strict conditions imposed by financial institutes. This problem needs to be addressed, so the benefits of the stimulus measure can be maximised.”

REIC expects the property market this year to contract by 1 to 2 per cent thanks to the fallout of the new wave of Covid-19 infections.

“Property transfer nationwide is likely to see a 10.6 per cent dip in the first quarter, while for the entire year, it is expected to drop by 1.5 per cent or by 353,236 units compared to the previous year,” Wichai said.

“Meanwhile, the total value of transferred properties in the first quarter is expected to drop by 7.2 per cent, while for the entire year, it will drop by 5.6 per cent, or Bt876.1 billion.”

Published : February 18, 2021

By : THE NATION