Stricter controls and paperwork putting brakes on residential property market
The honorary president of the Thai Housing Business Association, Atip Bijanonda, is tipping the local residential market may fall by up to 10% this year starved of economic confidence, the global economic slowdown and the loan-to-value limits.
But he also believes the situation is far from the situation leading up to the 1997 economic collapse.
The Greater Bangkok residential market is now valued at 372 billion baht (in 2018). That’s a rise of 29% compared to the year earlier. So the drop this year is off the back of a very successful 2017.
For this year the market has fallen by 5%, according to the Thai Housing Business Association, with the largest declines in Q2, in retaliation to the LTV limits taking on April 1.
Some of Thailand’s major developers are now shelving some projects as the market soaks up a glut of properties constructed over the past two years.
Three property associations – the Housing Business Association, the Thai Condominium Association and the Thai Real Estate Association – are having meetings with the finance minister discussing the current property market.
Topics for discussion are the improvement in property regulation, construction permits, licences and stricter controls over developers and lending. The associations also want to discuss the current delays on Environmental impact assessments (EIAs). They say that since the responsibility for EIAs was handed over to the Bangkok Metropolitan Administration from the Office of Natural Resources and Environmental Policy and Planning in 2016, the process is now taking much longer.
Speaking to the Bangkok Post, Kobsak Pootrakool, deputy secretary-general to the PM for political affairs says that stricter lending criteria and the LTV rules are the main factors obstructing mortgage approvals for homebuyers
