1.3 million houses worth more than 2.6 trillion baht in Thailand are empty

1.3 million houses worth more than 2.6 trillion baht in Thailand are empty

Thailand is an «aging» nation. Although cities continue to grow, the population increases slightly. Due to this, empty houses appear. To date, there are about 1.3 million empty houses in the country, with a total value of 2.6 trillion baht.

The concept of an empty house means a completed, habitable house in which no one lives. The Government identifies such houses with the assistance of the electric power management. In some houses of this type, electricity is consumed, but in very small quantities, no more than 15 units per month. Such consumption means that the owners come to inspect their house, it is possible to do cleaning, but they do not live there. However, abandoned and destroyed houses are not taken into account.

From the information of Energy Department, it was found that there are about 500,000 empty houses in Bangkok, but if we count the territory of greater Bangkok (the city and its surroundings), there will be a total of 617,923 vacant houses, which is quite a lot. In Bangkok and its surroundings there are only 4,654,370 properties of all types of houses, which means that 13.3% of the total number of houses are vacant, or for every 8 houses there is 1 empty.

According to Thai Center for Real Estate Research and Evaluation, out of 27,708,635 real estate units across the country, 1,309,551 properties are empty (about 4.7% of all houses), which means that for every 21 houses there is 1 empty.

The number of vacant houses in 1.3 million units has a total cost of 2.6 trillion baht, or almost as much as the budget of Thailand. If 200,000 real estate units of new housing are launched in the country in a year, this means that there is almost no need to build new projects for about 6 years.

The solution is to value these assets at market value and tax unused homes at a rate of 2% (or 40,000 baht) per year for every 2 million baht of housing value to encourage owners to use the property or sell to increase supply on the market. The more offers there are on the market, the lower the house prices.

If the house is not used and taxes are not paid for three years in a row, the government should put it up for auction. If the owner is not found during this time, the money will be in a financial institution so that the owner (if any) will take it later.

Buying an old house means having to invest in its renovation. For repairs, buyers have to buy building materials to improve, repair or buy new furniture. Some buyers take out a loan for these purposes, which will have a positive impact on the banking industry. Besides, buying empty houses at auction is relatively cheap compared to buying first-hand. In a word, empty houses are an important resource of the nation, which should be used with maximum benefit.

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