Visitors check out property deals at this year's House and Condo show. Courtesy of House and Condo Show Facebook

The expected dip in interest rates by 25 percentage points in the second half this year is expected to help the residential market, resulting in projected growth of 5.5%, in contrast with a decline of 0.7% without a rate cut.

Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the government's property measures are expected to have a positive impact on the residential market this year.

"The impact will become evident in the third and fourth quarters, as May and June see the opening of schools and universities, which are a financial burden on parents," he said.

"Homebuyers also tend to wait for campaigns in the second half."

Despite only six months of full impact, the measures are expected to increase residential market growth, with the REIC forecasting a 5.5% gain in residential transfers nationwide by the end of 2024.

Transfers are estimated at 386,861 units, up from 366,825 transfers last year, with a combined value of 1.1 trillion baht, a gain from 1.05 trillion, rising 5.6%.

The centre forecasts newly released home loans nationwide will grow by 3% to 699 billion baht.

These growth projections assume an absorption rate for low-rise houses and condos in Greater Bangkok of 35.4% and 49.8%, respectively, while in the provinces the rates are 24.9% and 36.7%, respectively.

The outlook also assumes GDP expansion of 2.7%, general inflation of 1% and an average minimum retail rate of 7.05% across six banks, dropping from the current 7.30%.

"Tightened mortgage criteria are also factored into this forecast," said Mr Vichai.

"Without the property measures, the number of residential transfers nationwide would drop by 1.5% from last year."

The property measures include the reduction of transfer and mortgage fees to 0.01% from 2% and 1%, respectively, for units priced 7 million baht and lower, along with two packages offering mortgages with low interest rates.

"If there are no property measures, but a 25-basis-point dip in interest rates, we anticipate a decline of 1.5% in residential transfers," he said.

"Including the property measures but no rate cuts this year, we forecast a decrease of 0.7%."

Last year, residential transfers nationwide dipped 6.6% to 366,825 units from 392,858 units in 2022, which grew by 14.3% from 343,706 units in 2021.

In 2020 and 2021, the market declined by 4.6% and 8.1%, respectively.

Mr Vichai said the residential market will shrink by 2.4% absent an interest rate cut, while the property measures have no impact on demand.