The residential market this year is expected to grow by 10%, even though eased loan-to-value (LTV) limits were not approved, and interest rates might not decrease soon, according to property developers.
Peerapong Jaroon-ek, president of the Thai Condominium Association, said a key driver would be economic growth, forecast at 3% or more, driven by the tourism demand.
"Housing demand in some segments such as middle to upper-income earners remains strong, while Chinese buyers are returning as the permanent visa exemption started earlier this month," he said.
The association predicts growth of 10% in the residential market in 2024 even though the government denied easing LTV limits, which was one of eight proposals made by the association and six other real estate associations.
"We received an official letter from the Bank of Thailand (BoT) notifying us it would not change its stance," said Mr Peerapong. "We are disappointed because the LTV limits have the greatest impact on homebuyers."
Many homebuyers really want a home but cannot seek additional funds to cover the difference in LTV when they apply for mortgage loans and the credit line of the loans is not sufficient, he said.
"Four of the eight proposals are in process and will be announced in the second quarter as they do not require approval from the cabinet," said Mr Peerapong. "One of them is an amendment to the Board of Investment [BOI] condo scheme."
The associations asked the government to increase the maximum unit price of condos in Greater Bangkok under the BoI scheme, which exempts tax, from the current 1.2 million baht to 1.5 million baht to match with the current costs.
This will assist homebuyers among lower-income earners, with the impact expected to begin in the second half, Mr Peerapong said yesterday at the House & Condo Fair being held at the Queen Sirikit National Convention Center through Sunday.
Pornarit Chounchaisit, president of the Thai Real Estate Association, said a decrease in interest rates may not happen soon, as policy interest rates need to follow the Federal Reserve.
When the central bank finally does cut interest rates, financial institutions may take their time following suit as they need to consider costs, said Vichai Viratkapan, acting director-general of the Real Estate Information Center.
The associations expect to have 4 billion baht in sales at the four-day fair and an additional 8-12 billion baht in sales after the event.