The Thai economy is improving and should show a satisfactorily continuous recovery. Increasing economic activity is also boosting consumer purchasing power, so people are more confident about their incomes and job security. These positive factors will help boost housing demand. Homebuyers are returning to the market amid this more satisfactory situation that is helping to hasten their decision-making.
Although the Cabinet has not extended the real estate sector stimulus incentives that will expire on March 28, 2010, KASIKORN RESEACH CENTER (KResearch) views that real estate market growth will be boosted by other factors during the year.
KResearch recently conducted a poll to study the residential real estate market trend and housing demand in Bangkok during the years 2010-2012. The poll, entitled “Homebuying Behavior,” was conducted February 15-21, 2010, using a sampling group of 600 persons in Bangkok, queried particularly during the 22nd Housing & Condo Festival. It was found that housing demand in 2010-2012 should persist. Of the responses received, 69.5 percent cited that they would buy a home, while 30.5 percent said that they had no plan to buy during that period.
Regarding those who plan to purchase a home, 60.2 percent said they would buy within 2010, and 18.8 percent planned to buy in 2011, while 17.8 percent said they would buy in or after 2012. Remarkably, a number of those who want to purchase a home in 2010 were quite high. This may be partially attributable to real estate purchase incentives that feature a reduction in transferand mortgage registration feesto 0.01 percent that will end soon on March 28, 2010. Some 64.8 percent of the sampling group responded that the incentives are a major consideration in their decisions to buy.
Meanwhile, 35.2 percent of the respondents said that the incentives had no effect on their decision. Therefore, developers should remain attentive to the market over the remaining time for the incentives (one month left) and should proactively conduct marketing campaigns to stimulate consumer interest.
For the outlook toward real estate after the end of tax incentives, KResearch views that the market will likely grow gradually, along with the recovery, because there are many remaining risks that are eroding progress, e.g., political uncertainty and problems affecting the stability of the global economic recovery. Buying will mainly be driven by real demand, i.e., those who want to buy property as a primary residence and have high purchasing power (they are actually the majority in the housing market). KResearch forecasts that housing completions in BMR in 2010 (excluding low-cost housing in the Ban Eua Arthorn program) will likely grow 4.5-6.2 percent, versus the contraction of 5.1 percent in 2009.