Thailand: No property stimulus in the pipeline

• A property stimulus package is absent from the government’s plans because developers can adapt to changes such as the central bank’s loan-to-value (LTV) ratio requirements, which are deemed appropriate for the current circumstances, says Finance Minister Uttama Savanayana.
• Regarding higher down payments for mortgages, Mr Uttama said developers have adapted to the LTV measures.
• Starting from 1 Apr 19, homebuyers are required to make a minimum down payment for third and subsequent mortgages of 30% of the home price, with second mortgages set at 10%-20%, depending on how long a borrower has made payments on the first one.
• The LTV ratio of 90-100% remains unchanged for those planning to buy a home priced below THB10mn, but the ratio is lowered to 80% when the borrower buys a residence valued at THB10mn or higher.
• Pornarit Chounchaisit, president of the Thai Real Estate Association, said many residential developers have shifted to launching more low-rise housing like single detached houses, townhouses and duplex houses as condo activity plummeted in 1H19.
• “Developers that keep launching new condo supply will find it more difficult, as the sales rate is not as good as expected and will result in a large amount of inventory,” Mr Pornarit said.
• Poor sentiment in the housing market loomed in 2Q19 after the LTV curbs took effect on 1 Apr 19. The new rules had a strong impact on new housing sales in 2Q19.

External Link : https://www.bangkokpost.com/business/1735083/no-property-stimulus-in-the-pipeline