KANANA KATHARANGSIPORN
        LTV limits squeezing out potential buyers
        The government's fresh property stimulus package is seen as insufficient to improve the housing market as homebuyers still cannot access mortgages with the loan-to-value [LTV] limits, says an industry veteran.
Prasert Taedullayasatit, honorary president of the Thai Condominium Association, said the latest property package that includes a temporary cut of housing transfer and mortgage fees to 0.01% cannot help as long as homebuyers are being rejected for mortgages because of the LTV limits.
        "The LTV measure should be revoked or applied only from third houses until the economy improves," said Mr Prasert. "Once the rigid rules are revoked, the government should re-evaluate the situation."
The cabinet on Tuesday approved the property stimulus package that includes a temporary cut of mortgage and transfer fees to a single rate of 0.01% for homes priced up to 3 million baht.
        The package is meant to help developers dispose of their inventories and will be enforced after the Interior Ministerial Announcement takes effect, running until Dec 24, 2020.
At present, property transfer and mortgage fees are 2% of appraisal or selling prices, whichever is higher, and 1% of home loans, respectively.
The government believe putting a cap on homes with price tags of up to 3 million baht will help middle- and low-income earners who want to own their own home.
        For houses priced 1 million baht, buyers are subject to 200 baht total in transfer and mortgage fees if the measures come into force, instead of 30,000 baht.
        The sluggish economy and the LTV regulations that took effect on April 1 have dealt a blow to the property sector.
        Of the 553 condo projects recorded in metropolitan Bangkok during the first half this year, there were 64,969 unsold units valued at a combined 265 billion baht, up 38.4% year-on-year, according to GH Bank's Real Estate Information Center (REIC).
Total unsold properties amounted to 152,149 units at 1,670 projects, with a combined value of 670 billion baht.
REIC estimates property sales will shrink by 5-7% this year.
        Many developers learned a month ago about the government's plan to apply the new stimulus measures. The sentiment index of housing developers in Bangkok for the third quarter from the REIC rose to 48.2 from 42.2 in the second quarter. The uptick was higher for listed firms at 50.7, up from 41.9, while that of non-listed rose to 44.5 from 42.7.
        However, housing developer's expectations index for the next six months dropped to 58.0 from 58.4. The index is over 50, meaning developers are positive about the market. The expectations index for listed firms was 61.3, up from 59.9, as they are confident the economic situation and their investment over the next six months will improve.
        The LTV measure should be revoked or applied only from third houses until the economy improves.
        PRASERT TAEDULLAYASATIT
        Honorary president, Thai Condominium Association