The government should bolster the provincial economy by enhancing the agricultural sector as this will create a ripple effect in Bangkok and ultimately stimulate demand for housing nationwide, say developers in the Northeast.
Jaturong Thanapura, president of the Udon Thani Real Estate Association, said the government's stimulus policy should extend to the provincial level in order to drive the overall economy.
"The measures should instil confidence in home purchases by bolstering confidence in people's income," he said. "Digital wallets can assist with this."
To improve housing demand, the government should help the agricultural sector, which is dealing with adverse weather conditions, said Mr Jaturong, also managing director of Udon Thani-based developer Rachaya Real Estate Co.
Uran Panjaruang, vice-chairman of the Ubon Ratchathani Chamber of Commerce and managing director of property developer Locus E&C, said the government should offer crop price guarantees.
"When young members of farming families migrate to urban areas or big cities and don't have the burden of remitting money home to support their families, they aspire to purchase homes. This contributes to the nationwide demand for housing," he said.
However, despite strong demand, homebuyers are often limited by their capacity to own a residence due to factors such as debt obligations and the stringency of financial institutions.
"The government should solve the export contraction because export growth can help boost the overall economy and eventually alleviate the concerns of the Bank of Thailand regarding mortgage lending," Mr Uran suggested.
Nuttapong Prasansivamai, president of the Nakhon Ratchasima Real Estate Association and managing director of property firm Auchi Auchai, suggested loosening the loan-to-value requirements.
"Although household debt is high, borrowing for home purchases should not be restricted because most homebuyers do not want to risk foreclosure. Borrowing should be discouraged for purchasing luxury items," Mr Nuttapong said.
Vichai Viratkapan, acting director-general of the Real Estate Information Center, said the Baan Dee Mee Down scheme offering a cash rebate of 50,000 baht applied in 2019 should be reintroduced as it can help reduce payment burden.
The number of residential units newly sold in five northeastern provinces -- Nakhon Ratchasima, Khon Kaen, Udon Thani, Ubon Ratchathani and Mahasarakham -- totalled 1,892 units worth 6.85 billion baht in the first half of 2023.
These figures declined by 31% and 42%, respectively, from the first half of 2022.
With an increase in the number of new supply launches totalling 3,007 units worth 10.3 billion baht, the number of unsold units rose to 12,829 units worth 44 billion baht.
The largest decline in new sales was in the condo segment, which contracted by half to 299 units.
Low-rise houses saw a 25% drop, with townhouses leading the decline at 34% down to 172 units, followed by single-detached houses, which dropped by 30% to 989 units, and duplex houses, which fell 4.6% to 373 units.
Khon Kaen saw the largest number of new launches totalling 1,378 units worth 4.4 billion baht, accounting for 46% and 43%, respectively.
Nakhon Ratchasima had the largest number of new sales with 746 units worth 2.77 billion baht, representing 39% and 40%, respectively.
Khon Kaen saw the highest absorption rate at 2.5% per month, led by low-rise houses at 2.7%, while Mahasarakham had the highest absorption rate for condos at 2.6%.