Six-figure homes will sell like hotcakes after the Bt15,000 salary policy is implemented.”This will create a new market for residential projects priced up to Bt1 million,” Opas Sripayak, managing director of LPN Development, said yesterday.
The government has promised to raise the daily minimum wage from Bt215 to Bt300 and the monthly salary for university graduates to Bt15,000.
Opas said that although the pay increases would directly affect management and construction costs, pushing them up by 7 per cent and 10 per cent on average, the company would also get a tax break from the cut in corporate income tax from 30 per cent to 23 per cent. This will help cover the increase in expenses.
The wage policy will boost the purchasing power of first-jobbers to buy a home.
Currently, white-collar employees with a monthly salary of Bt10,000-Bt12,000 can afford to buy a home priced at Bt500,000-Bt700,000 with a 20-year mortgage charging 6-per-cent interest. That works out to monthly instalments of Bt3,000-Bt4,000.
At Bt15,000 per month, they will have the purchasing power to pay monthly instalments of Bt6,000-Bt7,000, which means they have can own a home costing at least Bt1 million.
“This will drive both the condominium and townhouse markets at prices lower than Bt2 million, especially city condos along new mass-transit lines,” Opas said.
Issara Boonyoung, president of the Business Housing Association, said this would be a challenge for developers to build homes priced lower than Bt2 million to focus on this market.
At present 70 per cent of properties in Greater Bangkok are priced lower than Bt5 million per unit, and half are priced lower than Bt3 million.
Now banks have launched special loan packages for residences priced below Bt1 million.
For example, Kasikornbank and TMB Bank have dropped the minimum for a mortgage to Bt500,000. This makes it easier for customers to get a loan from the bank to buy a home priced up to Bt1 million than before, when the minimum was higher than Bt500,000.