Thailand Property industry ‘could grow 5-10% this year’

Construction News

THE REAL-ESTATE industry could grow by 5-10 per cent this year despite the headwinds from both external and internal factors, according to the Housing Business Association.

“We project the condominium market will be flat or decline slightly this year, and the growth of the property sector will be driven by housing estates,” said Athip Peechanon, president of the association.

“We will see new property projects this year in only Greater Bangkok, and they will be in the hands of only big property players,” Athip told a forum on investment trends for the property industry hosted yesterday by NOW 26 and Krungthep Turakij newspaper.

Banks are being extremely cautious about extending loans to small and medium-size property firms with no clear development plans.

The high delivery of housing units to buyers was caused by the government’s stimulus measures for the property industry that ran from November to April. Consumers accelerated the transfer of their property to benefit from the stimulus package. Now that the stimulus has expired, consumers might delay taking delivery of their properties.

Housing transfers during the stimulus period soared 23 per cent to 68,500 units. The transfer of condos zoomed 106 per cent over the period to 63,000 units.

Upcountry, many condo projects are struggling from oversupply problems, which will last for at least a year, Athip said.

However, there is still real demand for housing estates in many provinces as they are recognised as a necessary asset by consumers there, he said.

Prasert Taedullayasatit, president of the Thai Condominium Association, said the first four months of this year saw 13 per cent fewer launches of property projects, which were worth about Bt83 billion, from the same period last year.

Many projects, especially condominiums, were focusing on moving their inventory.

However, in the last eight months of this year, 10 major developers will launch Bt220 billion worth of projects, mainly in Greater Bangkok. They are 67 condo projects, 92 townhouse projects and 74 detached-housing projects.

Wiwat Laohaphunrangsi, director of Areeya Property, said developers had created demand, but many of them had projects in hand and did not need to launch any new ones.

The price of land has also skyrocketed, so sites are not affordable for many developers, especially small and medium-sized players.

Deputy Finance Minister Visut Srisuphan said 2016 would be another challenging year for all businesses, including real estate.

The world economy is gradually recovering, but the global financial market is volatile.

The drought will hurt the agricultural sector, and the high level of household debt is a sensitive situation that needs to be monitored very carefully, Visut said.