Home building market set to grow despite challenges, insiders say

His confidence stems from the government's approval on April 9 of new measures aimed at boosting the country's real-estate sector.

The measures include lowering property registration and transfer fees, extending a reduction in mortgage fees to properties valued up to 7 million baht, providing tax breaks for individuals who build their own homes, and raising the value threshold of properties developed by companies eligible for the Board of Investment's tax incentive from 1 million baht to 1.5 million baht.

Worawut said these measures would help lift overall industry sentiment, resulting in a positive recovery during the second quarter and continued growth throughout the remainder of the year.

"For the first time, home builders have received a tax deduction for building a house on their own land. So it is expected that sales of home building markets and other developers will increase significantly after a lacklustre performance in the first three months of this year,” he noted.

He explained how the tax-deduction scheme would benefit four groups: consumers, home builder companies, construction suppliers, and the government. While consumers and home builders could save costs, suppliers could boost their sales as demand increased, allowing the government to collect more revenue from the 7% value-added tax (VAT).

Aside from the new-house building market, Worawut recommends that companies in the industry consider developing strategies for potential markets such as home renovation, which requires less money and time than building new houses.

"There is strong demand for renovation in the market right now and this demand is still growing," he said.
 

Although the overall market is very promising, he said there remained some challenges to handle, and the most concerning one at the moment is construction cost.

Pointing out that the price of steel and concrete has risen, he advised home builders to take prudent measures to control their costs in order to maintain product and service prices.

Manu Trakulwattanakit, Secon's managing director, agreed with Worawut that the government's new incentive schemes for the property sector would promote growth in the industry.

However, as the country's largest home builder, he noted the tax deduction has had little impact on his business. Instead, it directly benefits individuals looking to build or renovate a new home.

Still, he expressed gratitude to government programmes for encouraging consumers to consider purchasing property and improving overall market sentiment.

Speaking at a press conference on Wednesday to mark the company's major leadership transition to the third generation, he revealed Secon's business direction for this year, which will focus on building medium-sized and large houses priced at 6 million baht and up because of strong demand in that segment.

Meanwhile, thanks to the company's 15% increase in home orders in the first quarter, he believes Secon will continue to grow and meet its 2.2 billion baht target this year.