Outlook for property improving

But segments for foreigners still suffer.

The outlook for the local property market is bright for the rest of the year but remains dim for segments targeting foreigners, according to property developers, experts and agencies.

Atip Bijanonda, president of the Thai Condominium Association, said the condominium market would boom in the last four months of the year due to its attractive features, especially the higher liquidity than other residential markets.

Condominium buyers typically get capital gains when re-selling units during the transfer period. They also get higher yields from renting out the units than from other types of investment. Oil prices, which are on the rise, would be a major factor triggering the boom in the condominium market.

He forecast condominium registration growth in 2009-10 at around 7%, about 4% of which would be supported by the expiration of property tax incentives by the end of March 2010.

Mr Atip said condominiums with good sales rates in the first eight months were units targeting middle-income earners with offering prices of less than 80,000 baht a square metre or not more than 3 million baht a unit.

Meanwhile, condos priced higher than 80,000 baht a sq m or higher than 5 million baht a unit are not selling as quickly because foreign demand has vanished since late last year.

Issara Boonyoung, president of the Housing Business Association, said major listed developers gained a larger market share by 10-20% in low-rise housing sales in the first eight months.

“They obtained stronger financial support from banks and had other financial instruments,” he said at a seminar held yesterday by the Real Estate Information Center. “Non-listed developers should adjust themselves.”

He suggested the government should continue to support the property sector as it did in the first half when 80% of total housing finance was from the government’s special banks while the rest was from commercial banks.

Panthep Thanchitikul, president of the Home Builder Association, said the building market was an exception in a recession as there was no speculation and most customers paid cash.

Though high-end units in other markets were sluggish, they made up the largest sales in the home-building market. At the same time, a new trend in the building market is to replace houses more than 30 years old.

Visit Kunatharakul, president of the Real Estate Sales and Marketing Association, said units priced lower than one million baht were the most-sold product in the resale home market.

However, they will soon compete head-on with BoI Home housing due to newer conditions, competitive prices and better facilities. City condominiums remain the best-selling product, followed by townhouses near the city and very high-end single houses.

Aliwassa Pathnadabutr, managing director of the agency CB Richard Ellis Thailand, said that in the condominium segment, the proportion of foreign buyers fell from 34% last year to 16% in the first half while the number of investors dropped from 47% to 18%. Most foreign buyers bought properties for permanent residences, at 64%, up from 35% last year.

Phanom Kanchanathiemthao, managing director of Knight Frank Chartered (Thailand), said new supply of beachfront and sea-view villas in Phuket had vanished in the first half with no launches.

“The overall market in Phuket remained sluggish in line with the world’s economy as over 95% depended on foreign demand,” he said. “The market was also hurt by construction suspension of some projects and news on land ownership scrutiny.”