Home loan difficulties lead to six-year low in housing transfers

Difficulties in securing home loans have led to a significant decline in housing transfers across the country in the first quarter, reaching the lowest level in six years and marking the fifth consecutive quarter of decline.

The Acting Director-General of the Real Estate Information Center (REIC) Vichai Viratkapan reported that residential demand nationwide contracted in the first quarter, with housing transfers falling 13.8% year-on-year to 72,954 units.

He reveals that the first-quarter decline not only persisted from the first quarter of 2023 but also indicated a further decline year-on-year, following decreases of 0.8%, 4.4%, 6.9%, and 12.7% in the first, second, third, and fourth quarters of last year.

The value of housing transfers decreased by 13.4% to 209 billion baht, marking three consecutive quarters of year-on-year declines since the third quarter of 2023, with dips of 2.6% in the third quarter and 9.7% in the fourth quarter of last year.

REIC noted that the number of transfers in the first quarter was the lowest in 25 quarters since the first quarter of 2018, while the value was the lowest since the second quarter of 2019.

Newly released home loans nationwide mirrored this trend, reaching their lowest point in 25 quarters at 122 billion baht, representing a 20.5% year-on-year decrease, the most substantial decline in over six years, said Vichai.

“The key issue was financial institutions tightening their criteria for home loan approval.

“High interest rates aren’t a concern for many segments. Their primary concern lies in securing mortgage loan approval.”

Low-rise housing transfers saw the most significant year-on-year decline for the period, dropping 18.9% to 49,423 units valued at 146 billion baht, a 14.6% decrease in value.

Condominium transfers experienced a minor year-on-year decrease of 0.6% to 23,531 units, valued at 62.9 billion baht, a 10.7% decline, according to the centre, said Vichai.

“All price ranges, except for condos priced between 1 and 3 million baht, experienced a decline in transfers, attributed to a significant number of lower-priced condos launched in 2022 being completed in the first quarter, boosting the number of units within this price range.”

In the first quarter of 2024, 7,295 condo units priced between 1 and 3 million baht were transferred nationwide, accounting for 31% of the total condo units transferred during this period, reported Bangkok Post.