Developers call for more stimulus measures to revive Thai real estate market

Fearing an economic slowdown due to the ongoing US trade war and the recent major earthquake, three leading property associations in Thailand are urging the government to introduce additional stimulus measures to support the housing sector.

Economic Concerns Impacting Buyer Confidence

The Thai Condominium Association (TCA), the Thai Real Estate Association (TREA), and the Housing Business Association (HBA) have jointly expressed concerns that external pressures—such as the trade conflict initiated by former US President Donald Trump’s import tariffs and the impact of the recent 8.2-magnitude earthquake in Myanmar—will negatively affect house and condominium sales during the second quarter.

They warned that potential buyers may delay purchasing decisions due to economic uncertainty and diminishing confidence. As a result, the government should roll out further support measures to reinvigorate the property market starting in the third quarter.

Calls for Stronger Housing Sector Stimulus

Isara Boonyung, chairman of the TREA board of directors, stated that the combined effects of the US trade war and the Myanmar earthquake are expected to significantly hinder property transactions in the coming months.

He predicted a decline in both sales and ownership transfers of homes and condominiums in the second quarter. While the Ministry of Finance has already eased bank loan conditions and reduced transfer and mortgage fees (effective from 1 May through to next year), Isara argued that these efforts alone are insufficient.

He urged the government to consider further measures, such as lowering business taxes for property sellers and reducing income tax for homebuyers.

Impact of Trade War on Construction Costs

Sunthorn Sathaporn, president of the HBA, echoed concerns over the US trade dispute. He anticipated that a weakening baht—resulting from the ongoing trade tensions—would lead to increased costs for construction materials and machinery imported from the United States.

These increased costs would inevitably lead to higher house and condo prices, which, coupled with economic uncertainty, could further deter prospective buyers. Sunthorn estimated that condominium construction costs may rise by 3% to 5% mainly because developers would have to make their new condo buildings withstand future quakes.

TCA Urges Broader Incentives and Foreign Investment

Prasert Taedullayasatit, president of the TCA, called on the government to lift the ceiling on the price of houses and condominiums eligible for reduced transfer and mortgage fees. He also requested that commercial banks consider adjusting interest rates to better reflect the current economic climate, ensuring they remain fair and not excessively high for buyers.

Prasert proposed that interest paid on mortgages be allowed as a tax-deductible expense, thus providing additional financial relief to property purchasers.

Long-Term Strategies for Market Recovery

To attract foreign investment, Prasert suggested that the government extend lease terms for foreign nationals up to 60 years, allowing for more transparent and secure property investments in Thailand. He also recommended the creation of a government-backed fund to help low- and middle-income earners purchase homes.

Additionally, Prasert urged the government to consider long-term development strategies, such as building medical estates or healthcare hubs, to attract foreign investors to the Thai property sector.

He concluded by emphasising the need for both immediate and strategic, long-term policies to restore confidence and stimulate sustainable growth in the Thai property market.