Krungthai COMPASS sees the government tapping measures to stimulate real estate, hoping to reduce oversupply problems, especially in the townhouse and condominium segment. At a price level of less than 5 million baht with remaining stock for sale.
On April 11, 2024, the Krungthai COMPASS Research Center, Krung Thai Bank, reported that on April 9, 2024, the Cabinet decided to approve five measures to stimulate the economy through the real estate sector, which include 1) reducing transfer fees – Outstanding mortgage at 0.01% per item, covering residences not exceeding 7 million baht 2) Allowing tax deductions from building houses at the rate of “Million per ten thousand” not exceeding 100,000 baht in total
3) Happy Home special interest rate loan project, including 4) Happy Life for those who want to buy their own homes from GH Bank and 5) expanding the ceiling for BOI housing projects to 1.5 million baht.
Krungthai COMPASS believes that the reason why the government chose to stimulate the economy through the real estate sector is because 1) The housing development business is important to the Thai economy. This is reflected in the value of housing ownership transfers to Thailand’s GDP which has been as high as 5-6% over the past 5 years (2019-2023) and 2) Housing development is a business with a long supply chain, resulting in benefits. arising from The use of incentive measures will not stop only in the real estate sector, but will also benefit other related businesses as well.
In the next period, it is still necessary to follow the results of the measures to stimulate the real estate sector. Whether or not it will help reduce the oversupply problem that occurs in some segments, especially townhouses and condominiums. At the price level below 5 million baht, there are 74,500 units and 71,300 units left for sale, accounting for 96.3% and 84.7% of the stock at each price level. Meanwhile, more than half of the single housing inventory costs 5-10 million baht, which will also benefit from the stimulus.
On April 9, 2024, the Cabinet approved measures to stimulate the economy through the real estate sector. A total of 5 measures to support people’s housing. Willing to stimulate the economy through the real estate sector as well as related businesses Support Thailand’s promotion to the center of world industry (Thailand Vision) with the following details:
1. Improve measures to reduce registration fees for rights and legal actions for residences in 2024 by reducing transfer fees from 2% to 0.01% and reducing mortgage fees from 1% to 0.01% for the purchase and sale of single houses, semi-detached houses, row houses, commercial buildings, and condominium units, with a purchase price and appraised value of assets not exceeding 7 million baht and a mortgage amount not exceeding 7 million baht, effective from the date the law was promulgated in the Royal Gazette until 31 December 2024
2. Measures to reduce personal income tax for those who want to build a house. It is determined that individuals can deduct house construction wages at a rate of 10,000 baht per 1 million baht of construction costs, not exceeding 100,000 baht in total in the tax year in which the house construction is completed. According to the employment agreement made And the construction work starts between 9 April 2024 and 31 December 2025.
3. The Happy Home Project, worth 20,000 million baht, by GH Bank will support people with low to medium income to have their own homes. Including building construction. Purchase of land ready for construction and purchase of living facilities Through a loan with a fixed interest rate of 3% for 5 years, the maximum credit limit per person does not exceed 3 million baht. You can apply for a loan until 30 December 2025 or until the loan is in full according to the credit limit project.
4. Happy Life Project, worth 10,000 million baht, where GH Bank will support people to have their own homes, including building additions, expansions, or repairs. or redeem from another financial institution Through loans, the average interest rate for the first 3 years is 2.98%, with a credit limit per individual of 2.5 million baht or more.
5. The BOI housing project raised the ceiling to 1.5 million baht, with the BOI granting corporate income tax exemptions for a period of 3 years in an amount not exceeding 100% of the investment in housing construction for low-income earners in accordance with the criteria. and conditions. The housing price ceiling has been increased from 1.2 million baht to 1.5 million baht.
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