Political calm boosts home market

Rising confidence of buyers, developers

Thailand's second-hand home market has recovered with the easing of the political conflict, while housing developers' sentiment has risen after the military coup.

Real Estate Broker Association president Somsak Muneepeerakul said the country's second-hand home market has been moving in a positive direction since the second quarter when the National Council for Peace and Order stepped in to tackle the political conflict with its takeover.

The coup has led to consumers' increased confidence in making daily purchases and buying property.

Thailand's second-hand home market, worth 600-700 billion baht a year from about 300,000 units, was sluggish from late last year until the first quarter because of the political instability and fragile economy.

"We expect market sentiment to improve much more if the global economy is in good condition and Thailand's exports have good growth," Mr Somsak said.

"Lower interest rates will stimulate people to buy houses including second-hand ones. More importantly, the government should come up with new incentives to stimulate people's purchasing decisions, such as cuts to transfer fees and tax."

The Real Estate Information Center's housing developers' sentiment index rose 12.3 points to 56.0 in the second quarter, the highest level in five quarters, as developers were more confident after the coup,

Director-general Samma Kitsin said developers' confidence had improved in every aspect since late May. Many increased revenue and sales targets while expanding new investment and employment.

"During the first five months, they were not confident about launching new projects or new phases, nor making investments," he said. "Now they see the political situation is more peaceful, while economic plans and stimulus are more concrete."

The developers' sentiment index improved from 43.7 in the first quarter and 54.7 in the second quarter last year.

The listed developers' sentiment index was 62.3, higher than that of non-listed firms at 49.7, up from 45.6 and 41.9 respectively. The non-listed firms' index was the highest level in the past four quarters.

There were 30 listed developers and 136 non-listed developers surveyed. But calculation weight was given to both listed and non-listed firms equally. As the median value is 50, good sentiment is reflected by a score higher than 50.

The expectations index of housing developers, which forecasts the situation in the next six months, was 67.3 in the second quarter, up from 58.2 in the first quarter but slightly down from 67.4 in the second quarter last year.

The listed developers' expectations index was 71.6, up from 61.9 in the first quarter. The non-listed developers' index was 63, up from 54.5.

Source: Bangkok Post