Property Market Still Has Potential For Growth This Year

[george]

Property market still has potential for growth this year

BANGKOK: -- The property market still has a potential for growth this year because consumer demand continues to rise, according to industry executives.

Prasong Outran, President of Housing Estate Business Association, projected a project of single houses worth no more than 3 million baht each or that of townhouses worth around 1 million baht still had much room to expand since the customer demand represents 60-70 per cent of the total.

Currently, he said, potential homebuyers would give a priority to their purchasing power and repayment prospect before making a decision to buy houses.

He expected house prices would increase by around 5-10 per cent this year along with higher costs and inflation rates.

“In the first quarter of this year, total sales of houses have been affected by a political uncertainty to a certain extent. But a projection of the economic growth of 4-5% this year will help boost consumers’ confidence in the economic fundamental and make it easier for them to decide to purchase houses.

“So, it is believed the housing estate market will continue to grow in the remaining three quarters of this year. Should the market be able to grow 5-10% this year, it should be satisfying,” he said.

Athip Peechanont, President of Thai Condominium Association, projected the condominium market would grow in parallel with that of the property market at around 5-10 per cent.

Total sales for this year are expected to rise to 12,000 units from 11,000 units last year with condominium projects located in prime areas having high growth potential.

He conceded the condominium sales had dropped, particularly in March, since consumers were uncertain about the political situation.

However, he believed the sales would recover when the situation eases.

He said the upward interest trend had undermined consumers’ purchasing decision to a certain extent because an increase in lending rates by 1 per cent would reduce their repayment prospect by 6-8 per cent.

Still, he believed the consumers could bear higher burdens unless the interest rates rose swiftly.

--TNA 2006-04-17