Government urged to increase support for ailing property sector
Leading economists have called for increased government support for Thailand’s property sector, warning of a prolonged slowdown and its potential negative impact on the broader economy.
CIMB Thai Bank’s Amonthep Chawla emphasised the need for structural changes in the property sector.
He suggested shifting the focus towards providing services for the elderly, catering to health trends and attracting foreign investors.
“Stimulating the real estate sector can have a ripple effect on the economy, as it involves labour, construction and other industries,” he explained.
The bank recommended easing loan-to-value (LTV) ratios and debt-to-income (DSR) criteria to facilitate home purchases. While Thailand’s household debt levels are relatively low compared to other countries,
Amornthep noted that the sector’s multiplier effect on the economy makes it a worthwhile target for government support.
Kanyarat Kanjanavisut from the Economic Intelligence Centre (EIC) concurred, highlighting the sector’s importance to Thailand's GDP.
She predicted a continued slowdown in the real estate market for the next 2-3 years due to oversupply and sluggish demand.
The EIC urged the government to implement stimulus measures, such as further relaxing LTV ratios, to boost demand and reduce the inventory of unsold properties. However, she cautioned that the ultimate recovery of the sector would depend on improving overall purchasing power, particularly among lower-income households.
Kasikorn Research Centre’s Kanchana Chokpaisansilp echoed these concerns, noting a decline in home loans and the need for more comprehensive economic support.
“While stimulus measures can help, they should be accompanied by broader efforts to boost purchasing power and address the underlying economic challenges,” she said.
Overall, economists agree that targeted government interventions are essential to revitalise Thailand’s property sector and mitigate its negative impact on the broader economy.
