Greater Bangkok's housing market in the third quarter continued its decline from the first two quarters, with a larger drop because of the economic slowdown, the loan-to-value limits and high household debt, says developer Pruksa Holding Plc (PSH).
Supattra Paopiamsap, PSH's deputy group chief executive, said the housing market slowed in the third quarter with no signs of a recovery as the global and domestic economy was sluggish, weakening purchasing power.
"Weak purchasing power and mortgage rejections continued to hurt the property sector, despite strong demand," she said. "Banks' consideration period for mortgages extended from seven days to 10 days."
According to PSH's research, the overall housing market value in Greater Bangkok sharply dropped by 35% in the third quarter, compared with the same period last year, to 101 billion baht from sales of 23,555 units, down by 33%.
The first and second quarters recorded year-on-year drops of 18.7% and 8% to 101 billion baht and 99.8 billion, respectively.
In the first nine months, the housing market value in Greater Bangkok dipped 22% from the same period last year to 300 billion baht. Condos saw the largest year-on-year decrease with a drop of 28% to 160 billion baht.
Next were single detached houses, down by 20% to 73.8 billion baht, and townhouses, declining by 8% to 60.6 billion baht.
By unit number, condos and single detached houses posted the largest decrease with 22% each to 42,462 units and 10,938 units, respectively. Townhouses fell 10% in unit number to 20,849, while the overall market had a drop of 19% to 74,249 units.
The fall in the third quarter raised the number of unsold units by 4% to 196,185 as of the end of the third quarter, compared with the second.
The largest increase was condos, up 6% to 89,187 units, followed by townhouses, up 3% to 55,301 units, then single detached houses, up 2% to 46,969 units.
Of the total unsold units in the market, Pruksa had 5,600 worth 18.3 billion baht that were completed and ready to transfer to customers.
"We hope the property perks will help boost sales from these units," said Ms Supattra.
"We will use all methods to drive sales and try to help customers get mortgage approval."
The property tax incentives are scheduled to run until Dec 24, 2020, include cutting both transfer and mortgage fees to 0.01% from 2% and 1%, respectively, for residential units priced 3 million baht and lower.
Of the 5,600 units, Pruksa had 2,000 units worth 6.22 billion baht, accounting for 34%, which had unit prices of 3 million baht and lower.
"Our revenue and presales this year may be below our projection of 45 billion baht and 50 billion, respectively, because of many negative factors," she said.
PSH shares closed on Tuesday on the SET at 15.60 baht, down 40 satang, in trade worth 31.5 million baht.