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21 Jan 2016

Real Estate and Construction

Residential Property Market Should Regain Balance in 2016 (Current Issue No. 2696 Full Ed.)

In 2016, Thailand's real estate market will be boosted by supportive factors and, at the same time, hindered by risks. Home sales look set to improve, thanks to the government's real estate stimulus measures released in October 2015. Those incentives include a reduction in home purchase transaction fees to 0.01 percent on ownership transfer and mortgage registration, which will end on April 30, 2016, plus individual income tax benefits for those who buy their first homes at up to THB3 million and transfer ownership by March 31, 2016.
During 4M16, before these stimuli expire, real estate market activity should intensify because developers will likely carry out marketing campaigns to hasten purchases. KResearch has assessed that about 33,250 housing units in the Bangkok metro area may be processed through real estate developers during 4M16, up 27.7 percent YoY (that had contracted 26.9 percent). However, after the initiative ends, we will need to keep a close watch on the economy, which could influence consumer purchasing power and business decisions to invest in new projects.

Regarding residential property investments in 2016, it is notable that the market is currently rebalancing. Investors will be cautious about any new investments around the beginning of the year. Developers are still directing their focus towards marketing to help release finished unit inventories, which would be conducive to higher sales. If market sentiment improves, new investments are expected to follow on.

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