State vows fresh property stimulus
Operators present proposals to Prayut
The government on Thursday pledged to come up with fresh measures to spur the property sector but sought more consultation with related parties.
Real estate operators and homebuilders led by Pornarit Chounchaisit, president of the Thai Real Estate Association, met Prime Minister Prayut Chan-o-cha and his deputy Supattanapong Punmeechaow to submit proposals to the government for measures to help the real estate industry.
Mr Supattanapong said the proposals cover the relaxation of stringent loan-to-value (LTV) rules, a soft loan scheme, tax incentives and town planning rejigs.
He declined to disclose further details of the proposals.
"The private sector has assured the government that the overall real estate market still has demand and there is more purchasing demand for housing projects both from domestic customers and foreign buyers," Mr Supattanapong said. "Their opinion looks positive and this is a good opportunity for the government to use the property business to boost the economy."
He said the government is likely to take about two weeks to consider details of the proposals and consult related agencies such as the Bank of Thailand. The conclusion will be proposed to the Center for Economic Situation Administration over the next two weeks, he said.
A source from Government House who asked to remain anonymous said real estate operators have asked the government to scrap the LTV rules, citing them as a key obstacle to the growth of the industry.
The private sector said the absence of LTV rules will help draw consumers to housing projects, while the government can generate more revenue from transfer and mortgage fees and a special tax.
The source said the operators also asked the government to expand cuts of the transfer and mortgage fees to cover housing projects worth more than 3 million baht, as housing units worth less than 3 million baht account for only 30% of the market.
On May 7, 2019, the cabinet approved cutting both housing transfer and mortgage fees to 0.01% for 12 months from 2% and 1%, respectively, aiming to spur buying after critics said the previous measure to offer tax deductions of up to 200,000 baht for buyers of homes and condos worth up to 3 million baht would have a minimal impact on the market.
There are 2.87 million low- and middle-income households that have yet to own their own home. The government expects the measure to help 58,340 families purchase their own houses.