Bangkok market resilient

CB Richard Ellis

The Bangkok property market performed steadily during the first six months of 2008, especially considering political and economic constraints, according to data collected by CB Richard Ellis as part of its Market View Q2 2008 report.

Three apartment buildings were completed in Q2 2008, raising total supply to 10,576 units, which represents growth of 3.6 percent q-o-q and 3.9 percent y-o-y. The overall average occupancy rate for downtown Bangkok was 84.4 percent in Q2 2008, up 0.2 percent q-o-q. Primary sale prices of high-end and above units also rose, by 5.6 percent q-o-q and 31.3 percent y-o-y to Bt152,000/m2.

In the housing market, sales performance and unit transfers were healthy during Q2 2008, due in part to the government’s tax breaks. Overall sales figures are also healthy, with sales reaching over 50 percent at projects comprising both single-detached houses (SDH) and townhouses (TH).

“After a challenging first half of 2008, both for the Thai and global property sectors, we are hopeful conditions will improve later in the year. Our optimism is based on a number of factors, including a recent decrease in energy costs, and the potential for reduced political tension. However, both these issues are unpredictable and will need to be monitored closely”, states the report.

A majority of developers remain confident that 2008 targets will be achieved, despite the slowing economy and ongoing political uncertainty. Property Perfect chief operating officer Teerachon Manomaipibul said home buyers are still visiting the company’s residential project sites although the government announced a state of emergency earlier this week.

“We are carrying on with our business plan to launch six new residential projects worth about Bt10 billion, in the last quarter of this year”, said Teerachon.

Asian Property Development senior executive vice president Visanu Suchatlumpong said the company’s sales in this week showed growth of 10 percent compared to last month’s sales, indicating home buyers are not being put off by political concerns.

“We believe that political problems will have a limited impact, affecting some areas but sparing those outside the Phra Nakhon and Dusit districts”, he commented.

Foreign investors however are showing more concern about the standoff between the current Government and the opposing PAD party, and are delaying decisions while they wait for the political situation to stabilise, says Colliers International Thailand’s managing director Patima Jeerapet.

“Our customers have been asking about the political problems. Some of them have delayed their investment until the country’s situation becomes clearer”, said Patima.