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Real Estate Demand Expected to Fall Due to Inflation and Rate Hikes


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by Krajangwit Johjit

    

BANGKOK (NNT) - Rising inflation and interest rate hikes are expected to dampen demand for real estate and mortgages this year.

 

The Real Estate Information Center (REIC) predicts that the Bank of Thailand’s Monetary Policy Committee will raise its policy rate twice in the second half of this year. The headline inflation rate is expected to reach 6% and overall property market growth in 2022 will be around 3%.

 

With the projected interest rate hikes, people looking to buy a home or seek a mortgage are likely to postpone their plans until the situation improves. Home transfers in the first quarter of 2022 have contracted by 30% year-on-year due to the impact of the pandemic. Second-hand home demand, on the other hand, has increased at a record 9.3% year on year due to lower prices and government incentive schemes.

 

According to Kitti Pattanapongpiboon, chairman of the Housing Finance Association, second-hand homes will become even more popular due to their static price with excess supply and the situation in the non-performing asset (NPA) market.

 

The Housing Finance Association will also host the "2022 Home-Loan NPA Grand Sale" exhibition to help mortgage clients and attract home buyers and property investors. The expo will take place on July 1-3, 2022.

 

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-- © Copyright NNT 2022-06-16
 

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1 hour ago, ThailandRyan said:

Demand for housing, who the hell are they kidding.  I just looked at a house that was priced at 29 million Thb, which was reduced to 21 million Thb and still over priced.....dreams die hard for some......

10 years or so ago, I paid around 2 million for a piece of  land and paid a local contractor about 5 million to build my wife's house (about 400 sqM). I certainly would never get 7 million for it if I tried to sell it. It has a few drawbacks but we like where it is and the garden which is beautiful.

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I think the condo market will attract some interest and a bit of up movements as soon as tourism will go back to normal from people who with to buy a holiday place, not sure about the housing market though as this is a different market...

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Friend in Bangkok sent me a message this morning saying that Ananda Dev - Ideo branded condos are offering 30% discount on 3 of their projects and no transfer fees (did not state which projects). There must be a lot of developers starting to run into financial difficulty.

Edited by soi3eddie
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I think demand for properties will go up as soon as getting into Thailand becomes easy. Chinese will be back to buy as well as a number of my friends from US who will retire, sell their homes and move away from cold winters, shootings , lack of baby formula and other comodities , political/racial unrest ect in the US.

Edited by Tony125
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The real estate market might be dead but that doesn't stop some sellers from advertising their properties month in and month out at prices that obviously exceed the current market values. No one wants to lose equity but its difficult to make a big profit in Thai real estate at present. Thailand needs to market itself better to future foreign investors and retirees and make purchasing a property and living here more enticing in order to reinvigorate the market with fresh money.

 

 

 

 

 

 

 

 

 

 

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15 hours ago, ezzra said:

not sure about the housing market though as this is a different market...

It is one without farangs.  Until Thailand updates its mediaeval house owning laws the housing market will continue to languish.  Retiree expats should be cherished; they have family & friends who would love to visit yet there's so many hoops Malaysia reaps the benefits.

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56 minutes ago, newnative said:

    Quality properties priced correctly in excellent locations are still selling.

Exactly, properly priced.  I did some viewing of Villas for sale, and only 1 was priced correctly but it was not one to our liking.  I liked one and it was almost 8 million over what it should have been priced at, and the seller from what the agent said, would not budge at all.  People think they are sitting on gold and trying to sell what they have for double the price.  People who want to sell, truly want to sell, are motivated with the correct price, and will still come out ahead.  Buying land and building is always the option, sure I can not buy the land, but I can buy it in my Thai Daughters name.  Building is a pain in the rear...........

Edited by ThailandRyan
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