Clarity on first-home policy wanted
Property developers have asked the government to clarify its policy on zero-interest mortgages for first homes after the market dropped by 25 per cent in the third quarter year on year.
At a seminar titled "Property Market after the Election" held yesterday by the Real Estate Information Centre (REIC), Issara Boonyong, president of the Business Housing Association, said many people who had bought homes costing less than Bt5 million were putting off taking possession.
They are doing so because they expect the government to launch the zero-interest measure for homes in the under-Bt5-million price range. The government has also said it will offer Bt500,000 tax deductions for interest payments, which would cover people who buy homes costing up to Bt10 million.
"The property market is now in a vacuum. New-residence registrations and residential-project launches in the third quarter dropped by up to 25 per cent," Issara said.
Dr Apa Atthaboonwong, director of the Thai Condominium Association, said demand in the first seven months of this year had also been affected negatively by the Bank of Thailand's policy to cap mortgages at 90 per cent of the value of a condo. New condominium registrations in the period dropped 29 per cent year on year.
Launches of new condominium projects were also lower than last year, at only 71 projects with a combined 27,750 units.
Another impact on the market comes from a draft city plan saying that condominium buildings higher than 23 metres must be located on a road wider than 12 metres. That limits the number of locations for condominium projects at a time when land is already at a premium.
The REIC reported that only 46,000 new residential units were registered in Bangkok and its suburbs in the first seven months, down 9 per cent from the same period last year, which recorded 51,000 units.
Meanwhile, 243 residential projects comprising 58,350 units were launched in the first eight months of this year, down by about 13 per cent from the same period last year.
"We believe that when the government clarifies its policy, the property market will recover, because most home-buyers have enough purchasing power but are waiting to see what incentives they can get," REIC director-general Samma Kitsin said.
