Bangkok: Real estate centers anticipate a growth rate of 2.2-3.2 percent in the housing market for 2025, aligning with an expected downward trend in interest rates.
According to Thai News Agency, the National Economic and Social Development Board (NESDB) has expressed concerns about potential import tariffs from the US, particularly affecting the automotive parts sector, which could necessitate a review of GDP projections this May.
Mr. Kamolpop Virapala, Managing Director of the Government Housing Bank (GHB), highlighted that the temporary relaxation of the loan-to-value (LTV) measure by the Bank of Thailand (BOT), effective from May 1, 2025, to June 30, 2026, will facilitate the entry of more high-priced houses into the market. This measure is expected to boost confidence in the real estate sector, encouraging the development of new projects. GHB anticipates a possible reduction in interest rates by the Monetary Policy Committee this year, which could lead to a better real estate market performance compared to last year, with a projected growth of 2.2-3.2 percent driven by government and private investments. The Real Estate Center is optimistic about reducing the transfer and mortgage registration fees by 0.01 percent as a stimulus for the sector.
GHB has set a loan disbursement target of 240 billion baht for 2025, surpassing the 236 billion baht target for 2024, marking a challenging goal. Efforts continue to address the non-performing loan (NPL) issue, with a reduction target to below 5 percent by the end of 2024. GHB plans to employ its model to tackle debt problems, including financial education programs that have enabled thousands to qualify for loans. The Real Estate Center anticipates a 16.8 percent increase in new project development in the Bangkok metropolitan area in 2025 compared to 2024, equating to approximately 73,291 units valued at 519,692 million baht.
Mr. Peerapat Tanthawanich, an economic modeling expert at NESDB, noted that the board’s initial 2025 GDP prediction of 2.8 percent, along with an inflation rate of 0.5-1.5 percent and a 3.5 percent growth in exports, may require revision. This is due to the imposition of 25 percent import tariffs by the US on automobiles, which could significantly impact Thai auto parts exports. The trade war’s escalation and the relocation of production bases from China and other countries pose substantial risk factors, prompting a necessary reassessment of the 2025 GDP target in May.
Despite concerns about high household debt levels, NESDB identifies positive investment and government budget factors, predicting a 30 percent increase this year. With 20 percent of SMEs classified as NPLs and a decline in lending across various sectors, the NESDB emphasizes the importance of government actions. These include promoting tourism recovery, investment in the Eastern Economic Corridor (EEC), and accelerating the construction of a railway connecting three airports, which is anticipated to stimulate real estate growth in the eastern region.