Bangkok’s residential property market could receive a boost in the third quarter of the year by a revised taxation structure, where transfer and mortgage fees would be slashed to zero after project launches. This initiative would mean that presales would likely fall by as much as 30 per cent.
The Thai Condominium Association’s said it had submitted the proposal to the Thai Chamber of Commerce as part of a drive for property market growth, after it dropped during the first four months of the year as project launches were postponed. Townhouse launches fell 18 per cent in the same period compared with the previous year.
The association’s new president said that the main proposals for revising the tax structure in the property sector were to bring the transfer fee down to zero and the mortgage fee lowered to the same level. This move would reduce transaction costs for home-buyers and boost residential demand.
If these fees are cut, it would help home-buyers reduce their costs when buying a property. The president also said the property market had slowed down this year as home-buyers postponed purchasing decisions and property firms held back on project launches.
Overall, home-buyers are worried that their future earnings may fall if the country’s slow economic growth is not restored, which has caused many of them to delay having units transferred to them. The impact of this directly affects the condo sector much more than townhouses and detached housing.
Condominium sales dropped when investors and speculators moved out of the market earlier on in the year, which means that demand for condo units in which people actually live will be more focused on older projects than on newly launched projects due to lower prices.
Pruksa Real Estate said the company had launched five condominium projects worth Bt4.8 billion in the first quarter and around 40 per cent of the projects’ value has been sold. The company is also planning to launch five projects worth Bt5 billion in the current quarter and form part of the developer’s plan to launch 50 projects worth Bt50 billion this year that will focus on low-rise residential projects.