Thai real estate sector urges government support to boost recovery

Seven major Thai real-estate associations have joined forces to submit a package of stimulus measures to the government and the Bank of Thailand (BOT) to revitalise the struggling property market.

The sector has faced significant headwinds in recent years, grappling with economic challenges, subdued consumer confidence, and high household debt. Despite anticipated economic growth of 2.3-3.3% in 2025, driven by government spending and a recovering tourism sector, the real-estate market remains sluggish.

Issara Boonyang, chairman of the board of directors of the Design and Construction Real Estate Trade Association, Federation of Thai Chambers of Commerce, said the seven associations, including the Housing Business Association, Thai Condominium Association, and the Thai Real Estate Brokers Association, are urging the government to implement measures to stimulate the economy through the real-estate sector.
 

          Key proposals include:

• Extension of tax incentives: Extending the reduction of transfer registration fees and mortgage fees to 0.01%, which was to expire on December 31, 2024, for another year.
• Reduction of land and building taxes: Implementing a 50% reduction in land and building taxes to alleviate the burden on both businesses and homeowners.
• Low-interest loan measures: Introducing low-interest loan schemes for low-to-middle-income earners through the Housing Bank and other financial institutions, with loan limits of up to 3 million baht and 7 million baht for different income brackets.
• Land allocation policy reform: Revising land allocation policies to allow for smaller residential plots to address affordability concerns.

Separately, the associations have urged the BOT to institute a temporary suspension of loan-to-value (LTV) ratios for housing loans to stimulate demand.

"Based on past experience, the temporary exemption of LTV measures did not have a significant impact on the overall economy," Issara said. "Banks remain cautious in lending, with high loan rejection rates. These proposed measures are not new and are crucial for market recovery."

Prasert Taedullayasatit, president of the Thai Condominium Association, emphasised the continued challenges facing the real-estate sector, including high household debt, low consumer confidence, and a significant decline in sales and ownership transfers.

"The reduction in transfer and mortgage fees is a crucial measure that must be implemented," Prasert said. "Furthermore, the temporary suspension of LTV restrictions is essential to stimulate market recovery."

He also stressed the need for a reduction in the policy interest rate and real interest rates. "While the policy interest rate has been reduced to 2.25%, the actual interest rates offered by financial institutions remain high, hindering investment and economic growth," he said.

The real-estate associations are urging the government to prioritise measures that will boost consumer confidence and stimulate economic activity, such as continuation of the 10,000-baht handout programme and expansion of affordable public=transportation options.