BANGKOK, Thailand – The Government Housing Bank (GHB) expects the real estate confidence index to recover faster, driven by positive factors such as government economic stimulus measures and the Monetary Policy Committee’s (MPC) decision to lower the policy interest rate, October 19.
According to the Real Estate Information Center (REIC) report for Q3 2024, the confidence index for residential property developers in Bangkok and its surrounding areas was recorded at 45.1, a slight decline from 45.2 in Q2 2024. The high-interest rates in recent quarters contributed to decreased real estate sales, reflected in a decline in the sales index from 47.3 in Q2 to 40.7 in Q3.
Despite the overall drop, there are positive indicators regarding performance and new project launches, aided by economic stimulus programs such as the digital wallet scheme and the reopening of investment in the Vayupak Fund. Additionally, the MPC’s recent policy interest rate cut from 2.50% to 2.25% and the introduction of low-interest housing loan products by GHB are expected to boost confidence among property developers. GHB is optimistic that the real estate confidence index will exceed the neutral benchmark of 50.0 sooner than expected.
Kamonphop Veerapala, GHB’s Managing Director, emphasized that the confidence index had been below 50.0 for seven consecutive quarters since Q1 2023. This trend has been driven by persistently high-interest rates, which impacted both sales and investment in the sector. However, improvements in several areas, such as business performance, project launches, and operational costs, are signs of a positive turnaround. The confidence index for non-listed small and medium enterprises (SMEs) also rose from 34.6 in the previous quarter to 41.0, indicating a reduction in concerns about the current business situation.
Given these positive signals, GHB believes the real estate sector’s confidence will rise above the 50.0 threshold faster than anticipated, reflecting a growing optimism among developers. (TNA)
