Plus Property views the relaxation of the LTV measures as a positive factor that can stimulate the real estate market across all price ranges. They have released survey results for the housing market for the first half of the year, indicating that condos priced under 10 million baht received a better response than those priced above 10 million baht, with a sales rate of 67.5%. Single houses and townhomes in both price categories (under and over 10 million baht) showed similar sales rates, with single houses averaging 57% and townhomes averaging 53%. It is believed that the LTV relaxation will serve as a starting point to stimulate the housing market, although it may take another 1-2 years after COVID-19 subsides for the market to return to normal. Additional strong stimulus measures that benefit all price levels could further enhance recovery.

Ms. Somsakul Limsoothapan, Deputy Managing Director of Business Development and Asset Management at Plus Property Co., Ltd., an expert ready to address all real estate service needs, revealed that the recent relaxation of the LTV criteria, which now allows 100% mortgage financing across all price levels and applies to all contracts until the end of 2022, is expected to stimulate the real estate market at all price levels. Previously, developers focused on launching projects at accessible price points to match the slowing purchasing power of customers. However, with positive signals regarding the reopening of the country and economic recovery trends, along with the LTV relaxation, it is believed that the real estate market will gradually recover, benefiting both affordable housing and luxury projects priced at 10 million baht and above.

Regarding the housing market survey for the first half of 2021 in Bangkok and its vicinity, Plus Property's research and development department found that the total new condominium supply was 10,018 units, a 38% decrease from the second half of 2020. Among the new projects, those priced between 40,000 and 90,000 baht per square meter accounted for the largest share at 44%. This survey also noted an increase in new supply priced below 40,000 baht per square meter and above 150,000 baht per square meter, indicating that developers are increasingly targeting a diverse consumer base this year. The average sales rate from the surveyed projects (both newly launched and ongoing sales) was 67%, from a total of 180,261 units. When categorized by the previous LTV criteria, the segment priced under 10 million baht had 166,315 units for sale with a sales rate of 68%, while the segment priced at 10 million baht and above had 13,946 units for sale with a sales rate of 60.5%.

For single houses, there were a total of 2,561 new units, a 46% decrease from the second half of 2020. The price range with the most launches was 5-8 million baht, which was the main focus for developers in this survey, contrasting with the previous year when high-end projects were emphasized. The average sales rate from the surveyed projects (both newly launched and ongoing sales) was 57%, from a total of 44,693 units. When categorized by the previous LTV criteria, the segment priced under 10 million baht had 33,846 units for sale with a sales rate of 56.7%, while the segment priced at 10 million baht and above had 10,847 units for sale with a sales rate of 58.1%.

Townhomes saw the largest decrease in new units among the three markets, with a total of 5,462 new units, down 58% from the second half of 2020. Most new projects remained in the price range of 4-5 million baht, which has consistently accounted for about 80% of new supply since 2018. The average sales rate from the surveyed projects (both newly launched and ongoing sales) was 53%, from a total of 80,452 units. There is high demand for townhomes in areas served by the Yellow Line subway in the eastern zone, which is close to job centers with complete amenities and convenient access to the city by car. When categorized by the previous LTV criteria, the segment priced under 10 million baht had 80,197 units for sale with a sales rate of 53.4%, while the segment priced at 10 million baht and above had 255 units for sale with a sales rate of 49.8%.

“The relaxation of the new LTV measures positively impacts housing across all price levels, both new and resale projects. It stimulates real demand from those looking to buy for actual living, as well as investors with purchasing power, making it easier for them to decide, especially in the condo market, where prices are currently low due to special promotions. If purchased and held as an asset until the market improves, prices will increase. For investors renting out properties, rental prices in prime locations will also rise, leading to higher returns. It is believed that this measure will not increase speculative demand, as the market has been sluggish, making it difficult to speculate excessively. If additional measures are implemented to stimulate the market in the same direction, such as expanding the ceiling for reducing transfer and mortgage fees to cover all price levels or other strong stimulus measures, it would further enhance the market's recovery opportunities. However, the assessment of the housing market's direction still needs to closely monitor the surrounding situation, including the uncertainty of COVID-19 outbreaks in Thailand, which will affect economic recovery, consumer confidence, as well as stability and employment that impact purchasing power and debt repayment capacity, which financial institutions will consider when approving loans,” Ms. Somsakul stated.