Firms say now is best time to buy realty

Thai Real Estate Association

Thai Real Estate Association

Prices are set to rise in the next couple of years, especially at the low end

After being stagnant in the first half, the Thai property sector has witnessed substantial growth in the third quarter of the year, particularly in the luxury condominium and housing estate segments.

Thai Real Estate Association president Somchao Tanterdtham predicted the realestate market would clock growth of between 5 per cent and 10 per cent in the third and fourth quarters.

“In the first six months, the real estate industry has not performed well because of economic instability and high inflation, which have raised the level of uncertainty in the minds of consumers,” Somchao said.

He is the managing director of NC Housing and his company has recently developed the 10th phase of Baan Fah Piyarom, Premier Park, in Lam Luk Ka, Pathum Thani, comprising 390 housing units. It has also completed the second phase of the Thanyathanee Home on Green project at Thanyathanee Golf club, also in Pathum Thani.

“We have seen the highest impact on medium to lowend projects because they target salaried workers as their core segment, whose purchasing power has been reduced because of soaring oil prices and high inflation,” he said.

Highend condominiums and housing projects have been affected less by these factors, he said.

Somchao said the prices of such realestate projects are expected to rise dramatically in the next couple of years because of strong inflation, soaring construction costs and prices of raw materials.

Many customers, who wanted to buy a house or a condominium, decided to buy this year on the expectation that prices would rise in the next couple of years.

“We have already seen some realestate projects in downtown Bangkok and some lowend housing estates starting to raise prices 5 per cent to 10 per cent,” Somchao said.

“Commercial banks will reduce their deposit insurance to Bt1 million [per account] in the next five years in compliance with the new Deposit Protection Act and many people who earn interest from bank accounts have sought alternative investment opportunities, such as investing in property, which gives higher returns,” he said.

KPN Lifestyle chief executive Korn Narongdej said the current economic conditions had affected many property companies, who have consequently recorded slower sales. Despite that, the performance of condominiums and housing projects was not as poor as seen in other segments.

KPN Lifestyle recently developed Vincente, a 35unit fully furnished, luxury condominium on Sukhumvit Soi 49.

“As I see it, a house is one of the four necessities for human life. And real estate is an interesting investment alternative because asset values are bound to rise significantly in the future,” Korn said.

Keppel Thai Properties marketing head Lau Gek Chuan expects this year to be a good one for highend property projects in Thailand.

“A lot of things have stabilised. Thailand exports a lot of rice and commodities, and the country’s economy is growing well and should get even stronger. This is a good time to buy property,” Chuan said.

Many property projects that had been built a year ago are still reasonably priced because developers incurred lower costs then, he said. However, things will become more expensive next year.

Keppel Thai Properties has developed two housing projects in Bangkok - the Villa Arcadia Srinakarin and Villa Arcadia Watcharapol, which cover 357 and 40 housing units, respectively.

About the author

Itthi C Tan Itthi C Tan
Itthi C Tan is a senior journalist with The Nation, Bangkok's independent English language newspaper and specialises in the property and real estate sector.
Other posts by Itthi C Tan ( 3 )

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