Demand for non-performing assets in housing sees a sharp increase, despite gloomy property outlook

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The Housing Finance Association said that it recorded a stronger sales of non-performing asset (NPA) loans during the recently held ‘Home-Loan-NPA Grand Sale 2022’ which surpassed 5.4 billion Baht as demand for 2nd hand condominium and houses priced under 3-million Baht continues to see strong demand.

Kitti Pattanapongpibul, Chairman of the Housing Finance Association, told that in July, the association organized a marketing activity to promote the sale of foreclosed properties or non-performing asset (NPA) of banks, financial institutions, and asset management companies under the name ‘Home-Loan-NPA Grand Sale 2022’ with total NPA sales of 1 billion Baht and total loan requests of 800 million Baht.

Home Loan-NPA Grand Sale 2022 was held between July 1-3, 2022, at Hall 8, Impact Muang Thong Thani.

“We expect to have sales from customers who visited the event both online and onsite including those who would decide after the event to the tune of no less than 3.2 billion Baht and having a total loan request at 2.3 billion Baht or a total of more than 5.4 billion Baht combined,” Kitti said.

The latest data available for similar event is from 2019 which saw nearly 2 billion Baht worth of transactions.

He added that there were many factors that may push buyers to make quicker decision such as the planned hike in interest rates, the government’s reduction of transfer and mortgage fees to 0.01%, which would reduce the burden for buyers by almost 30,000 Baht per million, and NPA prices that is 20-30% cheaper than a new house.

Secretary-general Alongkot Boonmasuk said the total number of visitors to the event both online and onsite was more than 33,000, divided into 57.4% female and 42.6% male. The age range of most visitors, or 28.4%, was between 35-44 years old, and another 27.6% was between 25-34 years old, a combined proportion of as high as 56%, while those aged 45-54 accounted for 16.3%, and 18-24 took the proportion of 14.5%.

As for the housing that visitors were interested in, consisting of 33.7% condominiums, 28.2% detached houses, 25.8% townhomes, and 12.3% duplex houses, it could be seen that condominiums have started to return to demand after energy prices in the market continue to climb to a very high level.

As for low-rise housing both detached houses and townhomes are still in demand as a result of the COVID-19 epidemic. The endemic has caused many buyers to shift their preference for larger spaces in the house to rise, so, in recent times, there has been an increase in demand for such types of residences.

As for the price level of houses that are in people’s interest, houses priced at 1-2 million Baht received the most attention, accounting for 32%, while second place was housing prices 2-3 million Baht, representing 22%, and the third place was housing prices 3-5 million Baht, 18%.

Whereas, housing priced at 5-7 million Baht, took the proportion of 10%, and housing priced below 1 million Baht accounted for 9%; as can be seen, housing prices under 3 million Baht are still a big market with a high proportion of 63%.

Meanwhile, interest in housing prices under 2 million Baht accounted for 41%, in line with the data from the Real Estate Information Center of the Government Housing Bank that indicates that second-hand houses priced below 2 million Baht have the highest demand because there are not many new houses supply with the same price level as second-hand houses due to rising land and construction costs, therefore, this type of resident is an alternative for those who want a house under 2 million Baht.

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