Ministry mulls raising price limit for housing
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Ministry mulls raising price limit for housing

People browse house and condo deals at a property fair. (Photo: Houseandcondoshow Facebook page)
People browse house and condo deals at a property fair. (Photo: Houseandcondoshow Facebook page)

The Finance Ministry may consider raising the price limit for housing units eligible for government support, aiming to stimulate growth in the real estate sector.

Speaking at the annual property seminar on Thursday hosted by the Housing Finance Association, Deputy Finance Minister Krisada Chinavicharana said the ministry is considering the issue, as proposed by the private sector.

Houses priced less than 3 million baht are currently entitled to government incentives, comprising transfer fees reduced from 2% to 1% and mortgage registration fees reduced from 1% to 0.01%.

Houses priced less than 3 million baht account for up to 75% of the housing loan portfolio.

Mr Krisada said for the "One Million Homes Project" handled by the Government Housing (GH) Bank to help homebuyers find affordable homes with low-interest loans, the ministry may increase the mortgage limit to 2 million baht per unit.

GH Bank offers flexible loans with a budget of 20 billion baht, providing mortgages of up to 1.5 million baht per borrower for a maximum repayment term of 40 years, with a fixed annual interest rate of 3% for the first five years.

"The real estate sector is a significant portion of the economy, accounting for up to 10% of GDP and generating a multiplier effect of 1.13 times. This means 100 baht invested in real estate has a ripple effect on the economy of 113 baht," he said.

Mr Krisada also addressed non-performing loans (NPLs) in the real estate sector, noting last year the NPL rate grew by 7% year-on-year.

However, he was less concerned about NPLs than special mention loans, which are overdue by more than 30 days but less than three months, as well as loans deemed status code 21, meaning debts overdue more than 90 days from the impact of the pandemic, which increased 31% and 25%, respectively, from a year earlier.

Pornchai Thiraveja, director-general of the Fiscal Policy Office, said the economy improved last month, with exports tallying US$23.3 trillion baht, expanding by 3.6% year-on-year, which marked seven months of growth.

Tourist arrivals in February also gained, with 3.35 million visitors, a 58.6% uptick year-on-year.

Consumption expanded as value-added tax collection grew 5.7% year-on-year, said Mr Pornchai.

Investment indicators remain mixed, with machinery imports increasing by 27.1% year-on-year, while cement sales decreased by 7.7% from February 2023. Revenue from property transaction taxes contracted by 15.4% year-on-year.

"Economic stability remained strong, reflected by headline inflation contracting 0.77% last month, while core inflation was 0.43%. Public debt as of January was at 62.2% of GDP, well within the fiscal discipline framework set by the State Fiscal and Financial Disciplines Act," he said.

"External stability also remains robust, capable of withstanding global economic fluctuations, reflected in foreign reserves reaching a high level of $252 billion as of February."

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