Three property associations forecast a slim impact from the recent policy rate cut, as interest rates for mortgages were reduced by only 0.125%.
The Bank of Thailand cut the policy rate by 0.25 percentage points to 2.25% on Oct 16, though some commercial banks waited until November to reduce their loan rates, said Pornarit Chounchaisit, president of the Thai Real Estate Association.
He said while the property sector should benefit from the rate cut to some extent, the impact would be minimal, slightly improving the market compared with last year as there is limited time for developers to act.
Mr Pornarit said some banks might be reluctant to offer more competitive loan interest rates if they prioritise maintaining healthy profits this year, possibly considering a larger rate reduction in 2025.
Soonthorn Sathaporn, president of the Housing Business Association, said the average interest cut for home loans issued by commercial banks is only 0.125%, not as large as the policy rate cut of 0.25 percentage points.
Finance Minister Pichai Chunhavajira said he plans to meet with the Thai Bankers' Association today, and three property associations said they would like the minister to help negotiate with commercial banks to improve access to loans.
Mr Soonthorn said the government's soft loan programmes via GH Bank and Government Savings Bank are good ideas, but mortgages from private banks account for 70% of total housing loans worth around 800 billion to 1 trillion baht per year.
Prasert Taedullayasatit, president of the Thai Condominium Association, said the interest rate cut comes at the right time as the property sector typically launches most projects in the final quarter.
This year, the value of new condos launched in the fourth quarter is projected to be 86 billion baht, equivalent to the combined total for the first three quarters.
The House & Condo Expo running from Oct 31 to Nov 3 at Queen Sirikit National Convention Center, hosted by three associations, is estimated to generate 20 billion baht in sales from more than 1,000 real estate projects.
However, Mr Prasert said the most critical threat for the property sector is not interest rates, but rather access to loans, which affects developers because if they cannot drain their stocks, it keeps them from launching new projects next year.
Speaking at the expo yesterday, Mr Pichai said the ministry is scheduled to meet private banks today to discuss measures aimed at mitigating the burden for debtors, particularly for mortgages and loans for pickups.
The minister said the government has made consistent efforts to reduce debtors' financial burden, but these measures take time to gradually create an impact.
For homebuyers, the ministry plans to discuss possible solutions, such as suspension of interest payments or conditional interest waivers, he said.