For Thailand, as for much of the world, the economic outlook for the Year of the Tiger is – appropriately – a balance of light and shade. But property is one area where the pundits see little danger of a paw (sorry) performance.
Roaring demand is certainly expected in Bangkok, says Colliers International Thailand. Patima Jeerapaet, the property consultant’s managing directors, expects luxury condominums in Bangkok to gain 5% this year while mass residential condos rise by 5-15%.
Colliers reckons that about 70,000 condos were sold in Bangkok last year – a slight dip on 2008 – but this year the consultancy anticipates an upswing to about 80,000.
The company also expects demand to be transformed by fugitives from creaking property bubbles in Vietnam and Singapore.
‘We are offering condominium units in Bangkok downtown priced at around 200,000 baht a square metre to Chinese-Indonesian buyers,’ Patima told the Bangkok Post.
As ever, the key factor in Bangkok’s condo market is proximity to a stop on the skytrain or MRT subway system. This consideration is unlikely to change in the coming years – except to become even more crucial.
The overall buoyancy of sales, though, is being driven by fundamentals such as inflation and building costs.
Some analysts have even uttered the phrase ‘property boom’ in their forecasts for 2010 – largely because Thailand’s inflation is comfortably outpacing its bank’s deposit rates, pushing investors into real estate.
New supply also looks unlikely to meet the recovering appetite for real estate.
Thailand’s Housing Business Association is currently trying to convince Thailand‘s government to extend property tax incentives to encourage housebuilding – set to wilt, in its view, from political disputes, a huge environmental impasse at the Map Ta Phut industrial estate and a probable rise in interest rates.
The association’s president Issara Boonyoung points out that last year’s new properties were from projects launched between 2006 and 2008.
This year, though, construction’s outlook has further darkened with an anticipated hike in materials as Thailand’s stimulus megaprojects get under way.
Of course, the Year of the Tiger could spring a few surprises, but the roar data certainly looks encouraging for property values.