Developers are more worried about the impact on the housing market of future interest rate hikes by the US Federal Reserve than they are about the sudden collapse of Silicon Valley Bank (SVB).
Meesak Chunharuckchot, president of the Thai Real Estate Association, said the collapse of the American bank is not expected to have a significant effect on the housing market, but anticipated increases in interest rates are likely to have a greater impact.
"These increases will likely have a greater impact on the global economy, and will eventually affect the export sector, the Thai economy, and home purchasing power," he said.
He said borrowing capability is a key issue among homebuyers in the pricing segment of 3 million baht and lower.
Even though the government's One Million House project offers low interest rates for home loans, a new post-election cabinet needs to approve its continuation.
Wasan Kiangsiri, president of the Housing Business Association, said those purchasing units priced 3 million baht and lower were concerned about obtaining home loan approvals as they have the highest rate of rejection for mortgage applications.
For those looking to buy units priced between 3-5 million baht, a significant concern is an increase in interest rates and their income security, as many of them have just started a family and have a range of associated expenses to consider.
Peerapong Jaroon-ek, president of the Thai Condominium Association, said the low-rise housing market is expected to see stagnant growth this year after surging during the pandemic. However, the condo market is predicted to grow by around 30%.
"Key drivers of the condo market recovery will include affordably-priced units and a resumption of foreign buyers," he said. "The rental condo market, which was sluggish during the pandemic, has already returned to 70% of pre-pandemic levels."
Between March 23-26, the three property associations will hold a House & Condo fair at the Queen Sirikit National Convention Center featuring 1,000 properties from 200 developers.
The associations are targeting 4.5 billion baht in sales at this event.