The government should extend its property tax incentives to next year to drive housing market growth in 2022, in line with the projected economic recovery, the Bank of Thailand suggested.
Don Nakornthab, the central bank's senior director for financial stability department, said extending the lower transfer and mortgage fees from the end of 2021 to the end of next year is another way to help the housing market next year.
"The government's incentives can stimulate [the property market growth] a lot," he said. "The central bank already eased the loan-to-value ratio for mortgage lending. The government should help drive the market further."
At present, the property incentives include a cut of transfer and mortgage fees from 2% and 1% to 0.01%, respectively, for units priced 3 million baht or less. However, the unit price coverage is too narrow, according to many developers.
As well as an extension to the effective period, the incentives may include the first 3 million baht for every unit price as those who can buy a house priced 10 million baht or more get less of an impact than those eyeing units priced 3 million baht or less.
The central bank forecasts GDP growth in Thailand at around 1% in 2021, compared with negative growth last year. In 2022, even though higher growth is expected, a full recovery would not take place until 2023.
"An improving economy next year will make commercial banks lower their guard for mortgage lending," he said. "However, there could be new factors, like the Omicron variant, which we need to watch out for."
He said the impact from the new variant may be minimal, as proven by a pickup in stock markets in the US and an uptrend in the Thai stock market. If this trend continues, economic concerns might subside.
Mr Don said the impact on the tourism market from the reopening on Nov 1 has been better than expected. This situation showed good signs until Omicron emerged.
"We will reforecast the 2022 situation as we earlier expected the number of international arrivals next year to reach a total of six million," he said. "To boost GDP growth to more than 5%, we need more than 10 million tourists."
He said one positive impact from the reopening towards the property market is that there is a higher chance that foreigners will buy a property in Thailand.
Kamolpat Swaengkit, country manager of property portal website DDproperty.com, said a property market recovery to the level seen before the pandemic would take place in the next few years as the volatile situation this year was a key obstacle.
"Our survey found 71% of Thai consumers still want to buy a house but decided to delay it," she said. "Key factors were lower income during the pandemic, while housing prices remained unaffordable."