Three real estate associations have asked the next government to extend the lease period for residential properties from 30 years to 60 years, as a new generation of potential homebuyers can no longer afford to purchase them.
Prasert Taedullayasatit, president of the Thai Condominium Association, said extending the leasehold period would enable tenants to obtain mortgages covering up to 100% of the property value, compared with the current 60-70%.
“For many people who cannot afford to buy a home, long-term leasing is a practical alternative,” he said.
“However, most do not have sufficient savings to secure financing for long leases.”
Mr Prasert said the current 30-year lease term, which typically can be renewed for another 30 years, does not qualify for mortgages as easily as a single 60-year lease. A 60-year lease offers security comparable to freehold ownership, he said.
This proposal is in addition to several others already submitted to the current government led by Prime Minister Anutin Charnvirakul.
As the Anutin administration is focusing on cost-of-living issues and is expected to dissolve parliament early next year, the associations plan to submit this request to the next government, said Mr Prasert.
“The proposal to extend the lease period could be considered controversial and politically sensitive. It may affect voter sentiment, so the current government is unlikely to act on it before the election,” he said.
“This proposal would be more appropriate for the next, more stable administration to consider.”
Other proposals previously submitted to the government include expanding the eligibility for reduced transfer and mortgage fees beyond residential units priced up to 7 million baht, allowing all price levels but with the fee waiver capped at the first 7 million baht of the property’s value, said Sunthorn Sathaporn, president of the Housing Business Association.
The associations also urged policymakers to cut the policy interest rate by 0.25-0.5 percentage points, extending the reduction to real lending rates in order to strengthen purchasing power.
In addition, the groups recommended the government provide mortgage guarantees to help homebuyers access financing and reduce rejection rates.
To ease the financial burden on the public, the associations also advised a 50% reduction in land and building taxes for 1-2 years.
The two associations and the Thai Real Estate Association are holding the House & Condo Expo at Queen Sirikit National Convention Center until Nov 2, featuring more than 1,000 projects nationwide worth over 700 billion baht from 150 developers. The organisers expect 4 billion baht in sales from the four-day event.