Real estate sector reforms aim to boost Thailand’s economic growth

Thailand’s economy is set to grow by just over four percent this year, according to the Finance Ministry, buoyed by new measures approved on April 9 to boost the real estate sector. The government’s strategic move is expected to generate significant economic activity, translating into THB 800 billion ($29.6 billion) in real estate, THB 400 billion in investment and THB 120 billion in consumption.

Pornchai Thiraveja, head of the ministry’s fiscal policy office, noted that the stimulus measures would boost the country’s economic growth by an additional 1.7 to 1.8 percentage points. “These measures will see the economy grow by just over four percent this year,” Thiraveja told a briefing.

The real estate initiatives, approved by the Cabinet, include reduced transaction fees for homes worth up to THB 7 million. Transfer fees and mortgage registration fees have been reduced to 0.01 percent, from two percent and one percent respectively. The government also plans to offer THB 30 billion in mortgages through state banks, along with tax breaks for some real estate developers and tax deductions of up to THB 100,000 for home builders.

Foreign investment in the Thai real estate market has seen a significant increase in 2023. According to the Real Estate Information Center (REIC) of the Government Housing Bank, as reported by The Nation, foreigners spent over THB 73.16 billion on 14,449 apartments, up 25% from a year earlier.

REIC Director Wichai attributed the increase to the recovering tourism industry and government policies that lifted visa requirements for visitors from China, Kazakhstan, India and Taiwan. Chinese nationals led the purchases with 6,614 units, followed by Russians, Americans, Myanmar and Taiwanese.