The residential market will contract by 10% next year as the easing of loan-to-value (LTV) measures for mortgages expires on Dec 31, 2022, says SET-listed developer Supalai.
The developer's managing director Tritecha Tangmatitham said the expiration of the LTV limits will have a strong impact on homebuyers as they will need to put up more money if they plan to use mortgages.
"The Bank of Thailand will not extend the easing of LTV measures as it has noticed signs of economic recovery, but the recovery is actually derived from the LTV measures," said Mr Tritecha.
He said homebuyers with units scheduled for transfer from December 2022 to January 2023 would have to speed up the process to ensure they are completed this year, to avoid the imminent LTV tightening.
The developer believes the end of the LTV measures will have a negative impact on the housing market next year.
The number of transfers is expected to drop by 10% as there will be many homebuyers unable to receive transfers as the LTV level falls from 100-110% to 80-90% of home value, said Mr Tritecha.
To cope with the situation, he said developers will offer fully furnished condos to let customers acquire a unit without having to buy furniture.
"This year was a good year for ready-to-transfer condos as we recorded growth of 130% in condo sales in the first nine months year-on-year," said Mr Tritecha.
Later this month the company plans to launch the 1.2-billion-baht condo project Supalai Blue Whale Hua Hin, its first project in that area.
The project is located on a 7.5-rai plot in central Hua Hin, comprising 525 units sized between 29.5-128 square metres and priced at 61,000 baht per sq m on average, or from 1.69 million baht a unit.
To attract Bangkokians and foreign customers, Supalai will offer a guaranteed yield of 6% for three years, he said.
Supalai also plans to launch two single detached house projects in Hua Hin next year as demand for resort home destinations is recovering, following in the footsteps of the first-home market, said Mr Tritecha.
