Rising inflation and interest rate hikes are expected to dampen demand for real estate and mortgages this year.
The Real Estate Information Center (REIC) predicts that the Bank of Thailand’s Monetary Policy Committee will raise its policy rate twice in the second half of this year. The headline inflation rate is expected to reach 6% and overall property market growth in 2022 will be around 3%.
With the projected interest rate hikes, people looking to buy a home or seek a mortgage are likely to postpone their plans until the situation improves. Home transfers in the first quarter of 2022 have contracted by 30% year-on-year due to the impact of the pandemic. Second-hand home demand, on the other hand, has increased at a record 9.3% year on year due to lower prices and government incentive schemes.
According to Kitti Pattanapongpiboon, chairman of the Housing Finance Association, second-hand homes will become even more popular due to their static price with excess supply and the situation in the non-performing asset (NPA) market.
The Housing Finance Association will also host the “2022 Home-Loan NPA Grand Sale” exhibition to help mortgage clients and attract home buyers and property investors. The expo will take place on July 1-3, 2022. (NNT)
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