Decreasing interest rates can lift prospective homebuyers' confidence, even in the luxury segment, by enhancing their financial flexibility and encouraging strategic wealth management decisions.
Nattagit Sirirat, senior executive vice-president of marketing and innovation at SET-listed developer SC Asset Corp, said a lower interest rate does not impact homebuyers' purchasing behaviour in the luxury segment, but it does have a psychological effect.
"For luxury homebuyers, securing the best value for their purchase is a point of pride," he said. "Lower interest rates do not influence their decision to buy, but rather provide them with additional financial options."
Mongkut Techolarn, chief operating officer of low-rise property development at SC, said the trend of customers in the luxury segment paying in cash has declined from 70% to 65%, primarily due to more strategic wealth management.
"Easing lending curbs for second- and third-home purchases can help boost demand in the luxury segment, as many buyers in this market seek a second home for specific purposes, such as proximity to a workplace or their children's schools," said Mr Mongkut.
The Real Estate Information Center reported yesterday that the housing purchase confidence index in Greater Bangkok improved to 42.9 in the fourth quarter of 2024, up from 40.5 in the previous quarter.
The proportion of prospective homebuyers planning to purchase a property within the next six months also increased to 28.2% in last year's fourth quarter, compared with 24.7% in the third quarter. This uptick was partly driven by lower interest rates and the introduction of low-interest mortgage products by financial institutions, which helped stimulate housing demand in the fourth quarter of 2024.
The report also revealed that the majority of home purchases were made for personal use (32.1%), rather than for investment purposes (15.8%), followed by purchases made as assets (14.6%).
The most in-demand price range for residential properties was 2.01–3 million baht (25.3%), while single detached houses remained the most sought-after property type (40.6%), particularly in the 3.01–5 million baht range.
Bangkok was the preferred location for homebuyers, accounting for 56.1% of demand, especially in key economic districts. In the neighbouring provinces, interest was highest in Nonthaburi, Pathum Thani, Samut Prakan, Nakhon Pathom and Samut Sakhon, respectively.