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source: The Nation March 26, 2008
Cuts in tax and fees make second-hand homes more attractive
The resale prices of homes have been rising between 10 per cent and 20 per cent
this year, thanks to the government's measures for driving property market
growth, industry experts said.
The measures are very attractive. Specific business tax has been reduced from
3.3 per cent to 0.1 per cent. The transfer fee has been reduced from 2 per cent
to 0.01 per cent. The mortgage registration fee is also down from 1 per cent to
0.01 per cent.
The measures are applicable to buyers of second-hand houses, who have had the
house registered for more than a year.
On March 4, the Cabinet said all properties in conformance with the Land Use law
and the Condominium law could also avail of these benefits. In other words, all
construction done by the owners themselves or by hired home-builders, or houses
that have been newly constructed on the owner's land, or property projects that
violate either one of the two laws, would not be able to avail of these
benefits.
Property brokers agree that the measures have significantly stimulated demand
and they expect the boom in the property industry to return, especially in
popular areas such as those located along the extended Skytrain route in the
On-nut area. Second-hand houses in the stretch from that area to the Samrong
area are also fetching good prices.
Brokers estimate that the number of second-hand and new condominiums which are
ready for possession will be significantly higher than last year. This
translates into an opportunity for consumers to see the projects before making a
decision. It is also expected that the growth in price per unit will rise to 20
per cent from 10 per cent last year.
The measures, which focus on all properties under the Land Use law and
Condominium law, also give many developers an opportunity to establish a new
business as second-hand home agents. Some of the major companies that have
already established such a business include Preuksa Real Estate, Asian Property
Development, LPN Development and Sansiri.
These developers have found that brands play an important role in consumers'
purchasing decision. Many companies have been working to create strong brand
awareness to take advantage of the business opportunity and maintain the value
of their assets.
Many brokers prefer to sell properties backed by strong brands. Not only are
they easy to sell, but buyers of these properties can also take advantage of the
government's new measures.
BCP Housing, a brokering company, serves as a second-hand home agent for all
second-hand Land and House branded houses.
The government's measures have also resulted in fiercer competition among
property brokers as major international brokers collaborating with local brokers
enter the market, Banyong Visatemongkolchai, president at Bangkok Commercial
Asset Management, said.
The latest international entrant is Harrison (Thailand) which recently signed a
memorandum of understanding with Century 21 to jointly sell second-hand
properties in Thailand for 25 years. Century 21 is an American company with
8,000 offices worldwide
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