The Thai property market experiences a decline in first quarter 2024.

The first quarter of 2024 saw a significant downturn in the Thai real estate market, with sales and transfers experiencing negative trends. Sales dropped by 25-30%, reaching the lowest point in six years. The townhouse market, in particular, recorded its lowest sales in 12 years since the 2011 flood crisis. Transfer volumes across all sectors also decreased, marking the first time in 30 years that such a decline has been observed. This decline is indicative of the reduced purchasing power of Thai consumers.

Foreigners have historically viewed Thai real estate as a global property investment due to its good infrastructure, schools, amenities, and friendly people. Approximately 25% of the 1 trillion baht real estate market value has been acquired by foreigners in the past, often for second homes or vacation properties. Prasert Taedullayasatit, president of the Thai Condominium Association, emphasized the potential of the real estate sector to boost the economy alongside tourism. He suggested streamlining the entire real estate process to capitalize on this opportunity.

During a seminar titled “Dissecting the Hot Issues in Real Estate: Where Are We Headed in the Second Half?” Prasert highlighted the importance of real estate as a key economic driver, second only to tourism. He recommended adopting models similar to those in Singapore and the Middle East by developing large-scale, man-made real estate projects to enhance competitiveness and attract investments for long-term economic growth. Leveraging Thailand’s geographical advantages, he believes the country can effectively compete with Singapore.

In the short term, Prasert proposed temporarily suspending loan-to-value (LTV) measures on an annual basis to stimulate the economy. Once the economic situation stabilizes, he suggested adjusting the LTV criteria to focus on the third house of Thai citizens, particularly in the lower-middle market segment.

Furthermore, there is a recommendation to advocate for and modify the condominium ownership regulations for foreigners by raising the threshold from 49% to 69% voluntarily in properties where foreign ownership has already hit 49%.

The proposal also looks at reshaping the economy by boosting competitiveness under a legal framework. This will involve setting up a fund to support low-income individuals aspiring to become homeowners.

Prasert mentioned, “Consultations with the Housing Development Association and the Thai Real Estate Association are anticipated to last for a fortnight before being presented to the relevant government bodies. The objective of these discussions is to eliminate various constraints, enabling the real estate sector to have a significant impact on driving the country’s economic revival.”

Source: The Nation Thailand