Deputy Finance Minister Paopoom Rojanasakul (photo: Ministry of Finance)

The relaxation of loan-to-value (LTV) measures combined with reduced transfer and mortgage registration fees should help expand both demand and supply in the real estate sector this year, says Deputy Finance Minister Paopoom Rojanasakul.

Speaking during a keynote speech on the outlook for the real estate sector this year, he said if the government approves extending the reduced transfer and mortgage registration fees to 0.01%, the effect when paired with the Bank of Thailand's LTV easing should hike residential unit transfers this year by 9.7% year-on-year.

Meanwhile, the number of newly developed units should grow by 22.6% compared with the previous year, said Mr Paopoom.

In contrast, if neither of these measures is implemented, unit transfers are predicted to decline by 3.5%, while newly developed units would decrease by 0.8% year-on-year. If only one of the measures is implemented, unit transfers would increase by 1.6%, while new project development would expand by 16.8%, he said.

According to Mr Paopoom, on the day of the earthquake, the number of transfers at Government Housing (GH) Bank temporarily declined, but the situation rebounded the next day.

The real estate and automotive industries remain in a slump, dragging down Thailand's economic expansion, while other industries have already recovered, he said.

Kamonpop Veerapala, president of GH Bank, said the impact of the earthquake is expected to be short-term, lasting no more than three months.

He said this year GH Bank will focus on low-rise housing and second-hand homes, as customers may be reluctant to live in high-rise buildings.

Following the earthquake, the bank introduced relief measures for affected customers, such as reducing monthly instalment payments for one year and allowing a three-month debt suspension.

Regarding the 2025 outlook, the Real Estate Information Center reported new projects launches this year should increase by 3% compared with last year. The stock of homes priced less than 7 million baht has decreased, yet a large inventory remains for homes priced more than 7 million.

New mortgage lending contracted last year by 13%, and without government support measures, the decline would have been greater, said Mr Kamonpop. GH Bank projects new mortgage lending to reach 240 billion baht this year, up 1.1% year-on-year.

Key factors affecting mortgages this year include the high level of household debt, the strict lending criteria of commercial banks, and the psychological effects from the earthquake.