The Monetary Policy Committee (MPC) of the Thai central bank is closely monitoring the country’s property sector citing weak demand, as the sluggish economy and delays in infrastructure spending continue to dampen buyer enthusiasm.
In its latest policy report, the committee said high outstanding supply in the property sector is a risk that warrants close monitoring as it has caused demand for property to decline significantly.
As Thai households start to pile up more debts, financial institutions are beginning to tighten up on loan requirements, causing more condominiums to remain unsold, particularly those valued above 1 million baht.
In February, new property sales declined by 18.9% month-on-month, while housing demand edged lower 1.1%.
The MPC said developers remain resilient to the property glut.
Sales of new condominiums and houses in the second half of 2015 also declined as developers adapted to prevailing economic conditions.
In October last year, the cabinet approved property-related stimulus measures including reduction in the housing transfer and mortgage fees to a mere 0.01% each for six months for homes sold at 3 million baht or less. Previous fees were at 2% and 1%, respectively.
The property tax incentives, applicable to both newly constructed and previously-owned homes, are available until April 28, 2016.