Logo of Phnom Penh Post newspaper Phnom Penh Post - Property prices in Thailand expected to jump up 3-5%

Property prices in Thailand expected to jump up 3-5%

Content image - Phnom Penh Post
A restoration of balance in Thailand’s property market and a rise in construction costs are expected to prompt developers to hike their prices by three-to-five per cent this year. MCOT

Property prices in Thailand expected to jump up 3-5%

Thai property developers expect to hike their prices by three-to-five per cent this year due to rising construction costs and a restoration of balance in the property market.

Richy Place CEO Apa Ataboonwongse on January 14 said now that some of the properties in stock since 2020 have moved, developers will need to adjust their prices to reflect the cost of construction, which has been rising since last year.

“In 2022, we expect to see property prices go up by three-to-five per cent,” she said. “Developers cannot maintain the same prices despite management cost having reduced over the past year.

“Also, due to Covid-19, most migrant workers have returned to their countries, causing labour shortage. This, in turn, has spiked the manpower cost and delayed most projects by 10 to 20 per cent from their previous schedules,” Apa added.

Uthai Uthaisangsuk, chief operating officer at property developer Sansiri, said that currently demand and supply in the property market are in a balanced position.

“Sansiri has less than 10 billion baht [$301 million] worth of unsold condominiums and some two billion baht worth of unsold houses, which means there is no need for developers to engage in price wars to get rid of stock.

“Instead, this year we will focus on improving after-sales service and improve the quality of the product to attract more customers,” he said.

Meanwhile, Wichai Wiratkaphan, acting director of Government Housing Bank’s Real Estate Information Centre, said the centre estimates that property prices in 2022 will surge due to an increase in the cost of construction materials, though the price of land will likely stay the same.

“This year we also expect to see developers rolling out fewer discounts and promotional campaigns as the demand in the property sector is starting to rise and is matching the supply,” he said.

On the other hand, property transfer and mortgage fees will remain at 0.01 per cent until the end of 2022 for properties costing no more than three million baht.

The government had lowered transfer fees from two per cent to 0.01 per cent and mortgage fees from one per cent to 0.01 per cent in 2019 in a bid to support the real-estate sector. The subsidy was to be offered until December 31, 2021.

“The Cabinet earlier this month agreed to extend the campaign until December 31, 2022, as part of the government’s economic stimulus plan,” Department of Lands director-general Nisit Chansomwong said on January 18.

The subsidy covers houses, condominiums or land with an estimated value of no more than three million baht. The subsidy applies to both new and second-hand property, but can only be used by Thai nationals.

“The department believes this campaign will help Thais get their own property more easily and will also promote the property sector as well as other related industries that have been suffering from the fallout of Covid-19,” Nisit said.

And finance minister Arkhom Termpittayapaisith on January 17 ruled out any reduction this year in the land and buildings tax, as relief had already been granted for two years and any further cuts would be a fiscal burden for the government.

He said that a 90 per cent reduction in land and buildings taxes granted in 2020 and 2021 had cost the government about 30 billion baht a year in lost revenue, which is a high burden.

The finance ministry has suggested that there be no further tax cuts and the legal rate be restored this year, he said.

The land and buildings tax is collected by the local government organisation. The amount is treated as local revenue, which is reinvested in developing that locality.

When the government announced a 90 per cent reduction in the land and buildings tax in June 2020, the ministry had to find money to compensate local governments for lost revenue.

Previously, the government had postponed the deadline for residents of land and buildings to pay this tax from April to August. The usual tax will now be paid in April, starting 2023.

THE NATION (THAILAND)/ASIA NEWS NETWORK

MOST VIEWED

  • Ream base allegations must end, urges official

    A senior government official urges an end to the allegations and suspicions surrounding the development of Cambodia’s Ream Naval Base, now that Prime Minister Hun Manet has addressed the issue on the floor of the 78th UN General Assembly (UNGA 78). Jean-Francois Tain, a geopolitical

  • Ministry taking steps over Thai ‘replica’ of Angkor Wat

    The Ministry of Culture and Fine Arts has dispatched experts to inspect the ongoing construction of a temple in Wat Phu Man Fah, located in Thailand’s Buriram province. This temple appears to be a replica of Cambodia’s renowned Angkor Wat. The ministry said

  • CP denied registration documents by ministry

    The Ministry of Interior will not reissue registration documents to the Candlelight Party (CP). Following a September 21 meeting between ministry secretary of state Bun Honn and CP representatives, the ministry cited the fact that there is no relevant law which would authorise it to do

  • PM to open new Siem Reap int’l airport December 1

    Prime Minister Hun Manet and Chinese leaders would jointly participate in the official opening of the new Chinese-invested Siem Reap-Angkor International Airport on December 1. The airport symbolises a new page in the history of Cambodian aviation, which will be able to welcome long-distance flights to

  • Minimum wage set at $204, after Sep 28 vote

    The minimum wage for factory workers in the garment, footwear and travel goods industries for 2024 has been decided at $204 per month, with the government contributing $2. Following several negotiation sessions, the tripartite talks reached an agreement during a September 28 vote, with 46 of 51 votes supporting the $202 figure.

  • Cambodian diaspora laud Manet’s UN Assembly visit

    Members of the Cambodian diaspora are rallying in support of Prime Minister Hun Manet’s forthcoming visit to the 78th UN General Assembly (UNGA 78) in the US’ New York City this week. Their move is an apparent response to a recent call by self-exiled former