The total residential property index projection for 2023 has been upgraded as reduced transfer and mortgage fees continue to offer benefits to buyers of mid-scale properties.
Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the total residential property index last year rose 21% to 91.7, from 75.7 in 2021. The 2022 figure is the highest since 2019.
"The key driver was the loan-to-value [LTV] limits that started in 2019 and eased in 2021, ending last year," Mr Vichai said.
"This year we forecast the index will decline by 1.6% to 90.2 as risks remain that exceed positive factors."
The total residential property index is projected using estimated supply-and demand-side figures, which are influenced by economic factors including GDP growth, interest rates, key policies and situations, the inflation rate, and absorption rates of residential units.
The 90.2 forecast for the 2023 index was increased this month from 89.5 in November last year as some factors changed.
The key driver behind the rise was on the demand side, including housing transfers and new mortgage loans, said Mr Vichai.
"In November last year, we estimated a drop of 18.5% in terms of housing transfer units for 2023 as the property measures that expired on Dec 31, 2022, attracted future demand in the first two months of 2023 to get transfers within the final months of 2022," he said.
Measures were announced at the end of December 2022 to keep the mortgage fee for units priced 3 million baht and lower unchanged at 0.01% for another year. However, the transfer fee was increased to 1%, from 0.01%.
REIC expects annual residential transfers to total 352,761 units, worth around 1 trillion baht, a decrease of 10.2% and 4.5%, respectively. This is better than the drop of 18.5% and 6.2% estimated in November 2022.
"The transfer number and value will keep decreasing because of the termination of LTV easing," Mr Vichai said.
"But with the extension of the property measures, the decrease will not be as severe as previously predicted."
The factors that have deteriorated since November 2022 include the GDP growth forecast for 2023, as it has been revised down to 3.5%, from 3.7%, and the inflation projection, which was revised up to 3%, from 2.6%.