Newly registered housing units in Greater Bangkok area during the first 10 months of 2010 surged 10 per cent to around 80,000 units, up from 72,950 units in the same period in 2009, according to the latest report from Thailand’s Real Estate Information Centre (REIC). Among them, 46,800 units were in Bangkok, while the rest were units in neighbouring provinces, including Nonthaburi, Pathum Thani, Samut Prakan, Samut Sakhon, and Nakhon Pathom.
According to REIC director-general Samma Kitsin, only in October 2010, there were around 8,700 newly registered units, 6,200 of which were in Bangkok. The latest figure showed a decline of 21 per cent from September but a gain of 12 per cent from October 2009.
As reported in Bangkok Post newspaper, there were 40,850 newly registered condominiums in the first 10 months of 2010, up 6 per cent from the same period in 2009. However, 13,400 of them were units from the National Housing Authority or the Baan Ua-arthorn low-cost housing projects.
Of the newly registered condominiums, 31 per cent were developed by listed developers, 36 per cent from non-listed developers and the other 33 per cent from the Baan Ua-arthorn projects.
In addition, a number of newly registered single detached houses totalled 25,300 units (up 4 per cent), with 11,100 townhouses (up 60 per cent), 1,800 shophouses (down 23 per cent) and 950 duplex houses (down 7 per cent) from the same period in 2009.
Bang Yai district in Nonthaburi had the highest number of newly registered low-rise units, followed by Muang district in Samut Prakan, Muang district in Samut Sakhon, Bang Bua Thong district in Nonthaburi and Klong Sam Wa area in Bangkok respectively.
The top five locations for newly registered condominiums were Samut Prakan’s Bang Phli district, Phra Khanong, Huai Khwang, Samut Prakan’s Muang, and Bang Khun Thian.
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Thailand Property market
Economic fundamentals remain strong and Thailand continues to be an attractive place to do business. The government’s GDP growth forecast for 2010 was recently increased to 6.5%-7.5% on the back of continued strong export growth and sustained domestic demand. The currency and the stock market are at all-time highs.
This strong rebound is again proof of the resilience of the Thai economy to the political uncertainty. Indeed, a more strategic approach to managing Thailand’s image overseas is required if Thailand is to remain competitive and thrive in the region. Much like how Investor Relations Departments function in companies, a single government spokesman should be given responsibility and be held accountable for managing the perception of Thailand around the world.
Some observers are concerned that the global financial crisis may affect the Thai real estate market. Generally, a real estate bubble occurs when property prices rise quickly in a short period, primarily from speculation – resulting in a supply-and-demand imbalance. When property prices are rising faster than the cost of money and banks continue increasing loan-to-value ratios, funding becomes easier – propelling additional speculation.
The completion of the Suvarnabhumi-Bangkok International Airport has spurred growth in commercial property markets in eastern Bangkok as well as in the beach resort of Pattaya. Thailand has become even more accessible by air with a wide range if International carriers using Bangkok as a hub. In recent years, there has also been a surge in budge carriers, offering very competitive prices to both local and international destinations.
Real estate developers in 2010 are more cautious and many have professionalized their operations
Thailand’s property market was able to rebound from past crises and there is every reason to believe it will be able to absorb the blow of recent political tensions. The taxation situation has actually improved the conditions for purchasing property in Thailand, and if property prices do dip slightly as a result of the current situation it may actually be a good time to buy as there is a very real possibility Thailand property will regain its golden outlook soon. As a result, the financial condition of most major housing developers in Thailand is much more robust than in the past. The development of the local bond markets and increasing domestic savings has the made the industry much less dependent on foreign funds, a significant difference from 1997.
Falling consumer confidence : The slowing global economy together with unstable local political and economic environments will result in falling consumer sentiment and confidence in Thailand. Consumers will delay home purchases because they will be unsure of current and future incomes – directly affecting real estate demand. The general public will also begin losing confidence in the financial sectors, although not as severely as in foreign countries.