Developers should reconsider the size of apartments and adjust some services so that housing prices remain unchanged.
Developers will also be more cautious about buying land to avoid higher costs due to the new tax.
Issara Bunin, honorary president of the Housing Business Association, said that the cost of building houses will increase by 5-10%.
Inflation and a sluggish economy will cause a decrease in the purchasing power of housing. While costs are rising, developers may not be able to raise house prices because home buyers may not be able to afford an apartment because their purchasing power has remained the same or decreased.
According to Mr. Issara, in order to keep housing prices at the same level, developers should reduce the area of apartments from 18 to 16 m2 for townhouses or switch to duplex houses instead of individual houses.
Tip Bijanonda, vice chairman of the Thai Board of Trade, said that developers of low-rise housing should adjust products to reduce costs, for example, by reducing unnecessary functions or using design solutions of a more budget class.
Vichai Viratkapan, acting director general of the Real Estate Information Center (REI), said that vacant land prices have been rising more slowly for more than two years due to the economic downturn caused by the pandemic. Over the past two years, many developers have frozen the launch of new projects and slowed down the purchase of land.
The 2020-2021 land and construction tax discount has not been extended this year, as a result of which developers will be more cautious about buying land in order to control the costs associated with the tax.
According to REIC, the price index for vacant land in Greater Bangkok (Bangkok and the nearest provinces) from the second quarter of 2020 to the first quarter of this year grew by an average of only 1.93% on a quarterly basis compared to 4.1% in 2015-2019.
The index showed the highest growth in 2018, when the government invested in many new public transport lines in Greater Bangkok, such as the yellow, pink and orange lines.
Growth slowed in the second quarter of 2019 after a credit restriction was announced during this period.
The land price index rose again in the third quarter of 2019 to the first quarter of 2020, after which it slowed down due to the pandemic.
The five main places where the land price index rose were in areas where new public transport lines are planned to be built.