Business Sector Welcomes MPC's Decision

The Bank of Thailand’s Monetary Policy Committee (MPC) has recently decided to reduce the policy interest rate by 0.25%, a move that has been widely welcomed by the business sector. This adjustment brings the interest rate down from 2.25% to 2% per year, effective immediately.

Impact on Real Estate and Lending Practices

Experts, including Pornnarit Chuanchaisit, president of the Real Estate Association, have noted that while the rate cut benefits businesses and homebuyers in the short term, the long-term effects could be harmful if financial institutions maintain strict lending practices. The potential outflow of foreign capital due to less competitive investment returns is also a concern.

Positive Signs for the Housing Market

Sunthorn Sathaporn, President of the Housing Business Association, views the rate reduction as a positive development for the real estate industry, potentially reducing financial costs for businesses and increasing public loan requests. This could stimulate investment in riskier assets like the stock market.

Experts Weigh In

Surachet Kongcheep from Cushman & Wakefield Thailand and Kessara Thanyalakpark from Sena Development Pcl both see the rate cut as a boost to purchasing power and a step towards a more vibrant real estate market. They also anticipate further reductions in mortgage loan interest rates by banks.

Call for Government Support

Business operators are advocating for government-supported long-term low-interest loans at a fixed rate of 3% for 20 years, a model that has been successfully implemented in countries like the United States and Japan. This would make homeownership more accessible to the public.

Support from All Sectors

Poomipak Julmanichoti, CEO of Sansiri Pcl, emphasizes the need for the interest rate cut to promote loan growth, noting that the sector has been stagnant for a long time. He also points out that Thailand's interest rate cut has been relatively modest compared to its neighbors, leading to a higher cost of living.