New property stimulus measures are unlikely to increase the sales of low-priced real estate as buyers in the segment normally do not pay taxes, according to industry executives.

The government should also extend the privileges to cover self-built houses, a style most preferred by people in the provinces, as well as second-hand homes, according to Khan Prachuabmoh, president of the Government Housing Bank.

Referring to the measure allowing 300,000 baht of loan principal to be deducted from taxable incomes, Assoc Prof Manop Bhongsadadt of Chulalongkorn University said that in practice, high-income earners would benefit. This is because several deductions already made reduce personal income tax to a tiny amount for low-income earners.

As well, he suggested that the government increase the maximum unit prices of houses whose developers can get tax incentives from the Board of Investment, currently capped at 600,000 baht, a level seen too low even for the cheapest units today. If the ceiling is raised to a more realistic level, more developers might be encouraged to offer more low-priced units.

Assoc Prof Manop also urged the government to relax conditions for existing mortgage borrowers to keep them solvent. Currently, missing installments for three months will result in their being classified as NPLs.

Atip Bijanonda, president of the Thai Condominium Association, said few buyers of low-priced condominium and housing units would benefit from the measure as their incomes were generally low, at below 20,000 baht a month.

"They are the most worrisome segment, as they are most vulnerable to losing their jobs and most difficult to get housing mortgages," he said.

The property segments with the highest potential for growth this year are housing units and condominiums priced between one and three million baht. Those with a gloomy outlook are high-priced condominiums and single houses, resorts, hotels, offices, industrial estates and serviced apartments.

Mr Atip believes there will be 25% unsold condominium units due to diminishing demand but developers may stand to gain from the trend as the prices of finished units are now 10% higher than when they were launched.

Samma Kitsin, director-general for the Real Estate Information Center, said condominium developers had to be careful about competition from resale units due to a high rate of 40% unit transfers last year compared to 30% before.

source : www.bangkokpost.com