Thai developers are urging the newly-formed government to provide special interest rates for first-time buyers as residential properties and interest rates are skyrocketing.
Housing units are increasing partly due to a 30-50% spike in land, construction, and wage costs. The minimum wage is also likely to increase due to the new scheme by the political parties likely to form a government, which could increase up to 600 baht per day.
REIC's acting director general Vichai Viratkapan added that the new low-rise houses price index that is available for sale in Greater Bangkok also rose from 128.3 to 129.7 in the second quarter. These increases were specifically for low-rise houses in projects launched in 2021-2022.
The price index for new low-rise houses in Bangkok went up 1.9% year-on-year and 1% year-on-year in Nonthaburi, Pathum Thani, and Samut Prakan. As for single detached houses, it went up 2.5% year-on-year and up by 0.8% year-on-year for townhouses.
However, salaries are only increasing by 5% per year, and as a result, it decreases Thai people's purchasing power for new homes. According to Mr Saenphin Sukhee, ways that would reduce the home instalment payment issues for first-time buyers would require the new government to introduce a special interest rate. The Bank of Thailand (BOT) should also help to initiate commercial banks' flexibility in granting home loans. Another possible alternative would be tax deductions.
