Housing prices in
Thailand are expected to increase by the end of this year due to rising costs of building materials and land, as well as an expected increase in the minimum wage that most parties promised during the election campaign, said Vichai Virabhan, acting director of the
Real Estate Information Center (REIC) of the State Housing Bank.
He added that this would be the second significant price increase in recent years.At the same time, he noted, commercial banks and other financial institutions have become more cautious in providing mortgage loans to customers after the Bank of Thailand decided not to extend the relaxation of the loan-to-value (LTV) ratio, a measure used to assess the risk of lending before a bank approves a loan. Moreover, it said a government measure to help debtors affected by the COVID-19 pandemic is due to expire by the end of this year, putting additional pressure on commercial banks to be more cautious when issuing new home loans.To offset the expected decline in purchasing power in the domestic market, he suggested that the new government should revise the
foreign ownership ratio for apartments in tourist provinces such as Bangkok, Chiang Mai, Phuket and Chonburi to help
real estate developers.
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In addition, he said there was a need to review the reduction of tax reduction on transfer of ownership and mortgage registration for residential properties not exceeding three million baht to focus on specific groups of people based on their income. Vichai also suggested establishing a housing loan guarantee fund, using about 10 percent of the fees on transfer of ownership each year as seed money, which would encourage financial institutions to provide more housing loans to real estate buyers.