Real estate market to experience inflation price hikes
Rising inflation and interest rate hikes are expected to impact demand for real estate and mortgages in Thailand this year due to the price of new homes rising in parallel with the cost of construction materials, according to the Housing Finance Association.
The government’s reaction to the outbreak of Covid-19 has had a major impact on the real estate market for the past 2 years. In the first quarter of 2022, new home sales fell by 30% year-on-year, according to the acting director-general of the Real Estate Information Centre, Vichai Viratkapan.
Thanks to Thailand’s post-pandemic reopening to international travellers this year the real estate market has steadily recovered since the beginning of 2022, along with the kingdom’s economic recovery. But the demand for used properties looks set to overtake the need for brand new homes, owing to cheaper prices and government incentive programs. Second-hand house transactions increased by 9% in Q1 of this year over the same period of last year.
The Bank of Thailand’s Monetary Policy Committee is expected to double the price of its policy rate, each time by 25 basis points. The inflation rate is predicted to rise to 6% and the average real estate market growth will be roughly 3% under the circumstance.
SOURCE: Bangkok Post
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