Property developers are hoping to clear their housing stocks worth a combined 80 billion baht by April 28, when the government's property tax incentives end.

Housing developers expect consumers to speed up their buying decisions as government tax incentives end next month. PANUPONG CHANGCHAI

The cabinet approved on Oct 13 last year property stimulus measures including cuts in the housing transfer and mortgage fees to 0.01% each for six months for homes priced 3 million baht or less, down from 2% and 1%, respectively.

The property tax incentives, applicable to both new and second-hand homes, run from Oct 29, 2015 until April 28, 2016.

The six-month period provides the biggest opportunity in a decade for developers to clear and drain existing housing stocks, said Prasert Taedullayasatit, president of the Thai Condominium Association (TCA).

There are currently around 30,000 unsold residential units that are completed and ready to transfer by April this year in developers' hands, with combined sales value of 80 billion baht.

"The first four months this year is a great time for all developers to accelerate clearing their unsold, ready-to-transfer housing stock, with competitive campaigns or discounts picking up as the property tax incentives end next month," he said.

Of the 30,000 units, around 10,000 units worth 20 billion baht are in the provinces, mainly in Phuket, Chiang Mai and Khon Kaen. Most of these units are condos, which saw sluggish sales the past few years.

Some 12,000 units or 40% are low-rise units including single houses, townhouses and duplex houses.

The TCA, the Housing Business Association (HBA) and the Thai Real Estate Association (TREA) will hold a House & Condo fair from March 10-13, 2016 at Queen Sirikit National Convention Center, where more than 1,000 projects from 200 developers will be introduced.

The majority of the projects in the fair will be completed with units remaining for sale and ready to transfer by next month. This will comprise 20,000 units worth a combined 50 billion baht, estimated Mr Prasert. 

"After the incentive period ends, developers will launch a huge number of new projects because they delayed them the first four months to focus on completed projects," he said. Condo sales this year would be stable or increase by only 5% from 182 billion baht in 2015, said Mr Prasert.

Pornnaris Chuanchaisit, TREA president, said the property market in the provinces remained sluggish, particularly the condo segment in major destinations like Phuket, where around 10,000 units are still unsold.

HBA president Atip Bijanonda said the low-rise market this year would be in the same situation as last year with townhouses being a major driver in Greater Bangkok. The provincial market will continue slowing, he said.

"When new condo supply shifts to the higher-end segment, homebuyers who can afford a medium- to lower-priced condo will shift to more low-rise units, particularly townhouses," said Mr Atip.

He suggested an extension of the leasehold period from the current 30 years to 99 years and an income ceiling for low-income earners from 15,000 baht per month to 20,000 baht in order to promote the Baan Pracha Rat low-cost housing scheme.

"The 99-year leasehold period is close to a freehold right, which makes it easy for banks to support mortgages. Otherwise, the Government Housing Bank may increase its credit line for rental homes to over 70% of the appraised price," said Mr Atip.