Plunge seen in project launches in Bangkok and suburbs

[webfact]

Plunge seen in project launches in Bangkok and suburbs
SOMLUCK SRIMALEE
THE NATION

BANGKOK: -- THE NUMBER of new residential projects launched in Bangkok and its suburbs this year is likely to be between 25 per cent and 35 per cent down on last year's level, with developers deciding to delay many of their new projects, according to property experts and research houses. The number of new homes transferred to customers in greater Bangkok, meanwhile, is forecast to decline by between 2.5 per cent and 9.4 per cent from the 2013 |level, when 143,543 units were delivered.

The forecasts reflect the country's slowing economy, which is expected by some to expand by less than 3 per cent this year, and the fact that the political turmoil is now spilling over into the second quarter.

KasikornResearch managing director Charl Kengchon told yesterday's "Mortgage lending in 2013 and Outlook for 2014" seminar, conducted by the Housing Finance Association, that the research house may revise its economic-growth forecast to below the current 3 per cent, as it was now likely that the country would not have a new government until the second half of the year.

Such a delay will impact directly on the Kingdom's economic growth as the government's budget for the fiscal year 2014/2015 will be delayed, while purchasing power has fallen following the continued rise in household debt, he said.

Slower growth will in turn negatively affect the property market and new mortgage lending this year, he added.

Meanwhile, KasikornResearch expects the residential market in greater Bangkok to see 75,500- 85,500 new units launched this year, some 35 per cent to 42.6 per cent lower than last year's 131,550 homes.

Its research also found signs that residential transfers from developers to customers would drop by between 2.5 per cent and 9.4 per cent, at 130,000-140,000 units compared with 143,543 units last year.

Bangkok Bank's research house, meanwhile, forecasts that new registrations and transfers this year will fall by between 2 per cent and 5.8 per cent, due to lower purchasing power.

However, the unit believes new mortgage lending will continue to grow by 3.9-6.1 per cent during the course of the year.

"Although new mortgage lending will still expand, the rate will be lower than last year, when growth of 10.9 per cent was recorded," the research house said.

Chatchai Payuhanaveechai, executive vice president of Kasikornbank, told the seminar that the bank estimated new mortgage lending across the market would be worth Bt560 billion this year, up 6.5 per cent from last year, while non-performing loans would be maintained at 2.3 per cent of the combined value of outstanding home loans.

Mortgage lending will still grow because customers who put a deposit on a new home in 2011 |and 2012 can now have their property transferred to them, he explained.


-- The Nation 2014-03-26

[Thai at Heart]

If that happens that will be sgnificant enough to effect GDP, surely.

[ezzra]

Just as well, the place has been built to the guilds already with new condo popping up

in every hole in the ground putting more pressure on already over stressed infrastructures

and air and noise pollutions....

[Gunna]

Maybe the slow down is because the developers have finally realised that they have built too many and would need to sell more of their vacant condos before building more. All those first car buyers who are now mortgaged to the hilt can no longer consider buying a condo. And those few wealthy rice farmer owners can't buy investment units because they haven't been paid.

[garydubbs]

is that the sound of a bubble popping..

Edited March 27, 2014 by garydubbs

[garydubbs]

Maybe the slow down is because the developers have finally realised that they have built too many and would need to sell more of their vacant condos before building more. All those first car buyers who are now mortgaged to the hilt can no longer consider buying a condo. And those few wealthy rice farmer owners can't buy investment units because they haven't been paid.

add to that chinese credit imploding and hong kong real estate prices dropping up to 20% in some high yield developments as ethnic chinese scramble for liquidity.. can't be long before this washes ashore here

[stoli]

I didn't buy when arrived in Pattaya 2 years ago, afraid of the bubble. Would like to see it happen, since I do not currently own, but I still feel that it is not going to happen soon. It may be slowing down in Thailand right now, but it has not moved to the negative. Be careful though to watch daily as things can change quickly. It did in the states. Almost overnight.

[ExpatOilWorker]

I didn't buy when arrived in Pattaya 2 years ago, afraid of the bubble. Would like to see it happen, since I do not currently own, but I still feel that it is not going to happen soon. It may be slowing down in Thailand right now, but it has not moved to the negative. Be careful though to watch daily as things can change quickly. It did in the states. Almost overnight.

Thailand is a different realestate market. Following the 1997 Asian Crises, prices didn't bottom out until 2001.

[rotary]

is that the sound of a bubble popping..

and a heart breaking for some.

[rotary]

I didn't buy when arrived in Pattaya 2 years ago, afraid of the bubble. Would like to see it happen, since I do not currently own, but I still feel that it is not going to happen soon. It may be slowing down in Thailand right now, but it has not moved to the negative. Be careful though to watch daily as things can change quickly. It did in the states. Almost overnight.

Thailand is a different realestate market. Following the 1997 Asian Crises, prices didn't bottom out until 2001.

Not sure about that one. I bought in 97 a few weeks after the crash buying for about 1/3 the price of 6 months before when you took the currency exchange rate into consideration & the discount the sellers gave

[ExpatOilWorker]

I didn't buy when arrived in Pattaya 2 years ago, afraid of the bubble. Would like to see it happen, since I do not currently own, but I still feel that it is not going to happen soon. It may be slowing down in Thailand right now, but it has not moved to the negative. Be careful though to watch daily as things can change quickly. It did in the states. Almost overnight.

Thailand is a different realestate market. Following the 1997 Asian Crises, prices didn't bottom out until 2001.

Not sure about that one. I bought in 97 a few weeks after the crash buying for about 1/3 the price of 6 months before when you took the currency exchange rate into consideration & the discount the sellers gave

The exchange rate distort the picture. What is your preferred currency? US$, GBP, Ruble? Yen? To get a fair value of the Thai realestate market it is only reasonable to look at prices in Thai baht.

Banks offloaded a lot of units through auctions in 2001/02 and some very attractive prices. I remember Omni Tower at Soi 4 was selling at 25,000 baht/m2.

[rotary]

I am referring to the baht going from 25 to the dollar to more than 50 overnight. That happened in 1997 in the good old days.

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