Amending obsolete rules regarding property development can improve home purchasing power, enabling homebuyers to afford units, say developers.
Tritecha Tangmatitham, managing director of SET-listed developer Supalai, said reducing the minimum size of a land plot to build a single detached house in a project, from 50 square wah to 35 sq w, can help trim home prices.
"If the land price for a house priced at 5 million baht is 30,000 baht per sq w, homebuyers can save 450,000 baht by the reduction of 15 sq w. This amount is very significant for homebuyers," he said.
The same concept should apply proportionately to duplexes and townhouses, said Mr Tritecha.
For a duplex, the minimum size should be reduced to 28 sq w from 35 sq w, while the minimum for a townhouse should be reduced to 14 sq w from 16 sq w, he said.
Issara Boonyoung, chairman of the committee for real estate development at the Thai Chamber of Commerce, said the reduction in these sizes would be in line with the current economy, characterised by high inflation, and the smaller size of today's households.
"The majority of Thai families now have fewer members, reduced from 4-5 individuals per family to just 2-3," he said.
"The revision of the minimum land plot size required for home construction in a project can also enhance home purchasing power."
This will also make it easier for homebuyers to obtain mortgage loan approval due to the decrease in home prices, said Mr Issara.
On March 21, the National Land Allocation Committee, responsible for overseeing the land allocation act that governs regulations for low-rise housing development projects, passed a resolution for this amendment, which is now awaiting approval from the cabinet.
However, one of the property measures approved by the cabinet on April 9 was an amendment to the maximum price for residential units under the Board of Investment (BoI) scheme, rising from 1.2 million baht to 1.5 million baht.
Mr Issara said this scheme would help lower-income earners afford a unit as unit prices in projects under the BoI scheme would be lower due to the waiver of corporate income tax for three years granted to developers.
"The increase in the maximum price is also a way to lighten the burden on government agencies that need budgetary support to provide housing for low and middle-income earners," Mr Issara said.