Eased LTV limits is another goal
Property developers are urging the government to quickly extend stimulus measures from 2024 to this year. (Photo: Wichan Charoenkiatpakul)
The government should extend property measures and relax loan-to-value (LTV) limits for second- and third-time buyers, as domestic demand is expected to remain weak in 2025, according to developers and consultants.
Nuttaphong Kunakornwong, chief executive of SET-listed developer SC Asset Corporation, said negative factors from last year continue to weigh on domestic housing demand this year.
“Homebuyers with purchasing power are becoming more cautious, while financial institutions are tightening their criteria for mortgages,” he said.
The transfer and mortgage fee reductions last year helped to stimulate demand, but these measures expired at the end of 2024, said Mr Nuttaphong.
To lift demand, the measures should be extended this year and apply to all price segments, he said.
“The government should immediately extend these measures without delay,” said Chaiyan Charakarul, chairman of mid-sized developer Lalin Property Plc.
“The consideration process shouldn’t take too long as we are already in the second month of the year.”
He said housing transfers in Greater Bangkok last year declined by 7.5% to 81,580 units from 88,206 units in 2023. Compared with 2019, the decrease in 2024 was 34.7%.
Low-rise houses recorded a significant drop of 20.6%, falling to 33,956 units from 42,787 units, while condos increased by 4.9%, rising to 47,624 units from 45,419 units.
However, most condo transfers were from presales made two years ago, with demand partly driven by foreign buyers, said Mr Chaiyan.
Compared with 2019, condo transfers last year declined 35.4%, while low-rise houses decreased by 33.7%.
Artitaya Kasemlawan, head of residential sales at consultancy CBRE Thailand, said potential homebuyers faced difficulties obtaining mortgages, contributing to lower sales and transfer volumes last year.
“Even though new launches declined in line with lower sales, unsold inventory has continued to rise each year, particularly in the low-rise housing segment,” she said.
According to CBRE Research, the number of unsold low-rise housing units in Greater Bangkok has increased annually, rising 16% in 2019, 3.9% in 2020, 4.8% in 2021, 5.7% in 2022, 4.9% in 2023 and 4.8% in 2024, tallying 155,000 units.
With new supply declining to 22,256 units last year, coupled with a dip expected this year to the lowest level in more than a decade at 18,000 units, the year-on-year growth in unsold inventory is projected to slow to 2.6%, reaching 159,000 units by the end of 2025, said Ms Artitaya.
“An interest rate cut could help significantly, making mortgage payments more affordable for homebuyers, especially if rates drop by as much as 1%,” she said.
Relaxing LTV limits for those buying a second or third residence could help stimulate demand in the upper-end segment, where buyers often acquire additional properties based on proximity to their children’s school or a new workplace, said Mr Nuttaphong.
“The LTV limits are intended to prevent speculation, but now there are no speculators in the residential market,” he said.
“To improve domestic demand and help homebuyers obtain mortgages to complete unit transfers, the LTV limits should be eased for all price ranges, as excess supply exists across all price segments.”
