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2024 measures to boost property sector to have limited impact
Despite the positive impact of the measures, SCB EIC anticipates a limited overall increase in market demand due to factors such as household debt, high interest rates, and limited access to housing loans affecting buyers with moderate to lower purchasing power.
Cabinet approved measures on April 9, 2024 to boost property sector with fee reductions, tax deductions, and low-interest loans. Impact on market demand expected to be limited, cautious approach needed for new projects.
The Cabinet approved measures on April 9, 2024, aimed at boosting the property sector. These measures include a revision of registration fee reduction for ownership and legal transactions of residential properties, a reduction in transfer and mortgage fees for properties valued under 7 million baht, individual income tax deductions for home construction, low-interest housing loans, and a promotion of residential projects for low-income earners by the Board of Investment.
SCB EIC believes that the revised registration fee reduction measure will be effective in stimulating the property market, particularly in the mid-priced segment. This measure is expected to encourage potential buyers with existing home-buying plans to make purchases, absorbing unsold units within the 3-7 million baht price range.
Despite the positive impact of the measures, SCB EIC anticipates a limited overall increase in market demand due to factors such as household debt, high interest rates, and limited access to housing loans affecting buyers with moderate to lower purchasing power.
The SCB EIC predicts that the revised registration fee reduction measures for residential property transactions in 2024 and other new measures introduced will have a limited impact on overall market demand. The demand from potential buyers will increase, but those with moderate to lower purchasing power will still face pressures from household debts, high interest rates, and limited access to housing loans.
Consequently, the overall property market is expected to remain slow in 2024, with a slight decline in residential property demand compared to 2023.
The total number of ownership transfers nationwide is projected to decrease by 2% compared to the previous year, and the number of units sold in Bangkok and its vicinity is expected to drop by 1%. Additionally, the total number of new residential units launched in Bangkok and its vicinity in 2024 is forecasted to decrease by 8% compared to the previous year due to the high number of unsold units. Furthermore, there will be a focus on mid-to-higher priced projects, resulting in a lower number of units per project compared to mid-to-lower priced projects.
The launch of new mid-priced residential projects should be approached cautiously to prevent oversupply and consider competition from the resale property market, which may be more appealing to buyers.
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