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The property market in Thailand continued its positive outlook for 2013, and the high demand for residential properties is expected to continue. Property prices and office and retail rents will grow by five to 10 percent this year as a result of Thailand’s property boom.
Condominium units priced lower than THB3 million (US$100,899) are predicted to be in high demand with sales in some areas slower due to supply initially outstripping demand.
The top seven property developers reported that presales dropped by 11 percent in the third quarter of 2012. Previously, developers had witnessed a total rise, year on year of 23 percent. They realized a total of Thai baht 124.2 billion (US $ 4.05 billion). This translated to 77 percent of the developer’s targets to that point in the year. With the increase in property launches along with the higher weighting towards condominium sales, the prediction is that presales will increase in the fourth quarter of 2012.
There is also an expectation for a rise in the demand for residential property in the outlying provinces. The demand for residential property in and around Bangkok is expected to stay relatively steady at a normal growth rate of five to ten percent in 2013. However, developer-built housing is expected to outpace this growth rate outside of Bangkok due to urbanization. Developers can expect to see most of their growth in sales reflecting this trend in the near future.
The Bank of Thailand will, in all likelihood, keep its interest rate low in order to boost the overall sluggish economy.
The Thai price index for single detached houses rose by 4.63% (1.48% inflation-adjusted) during the year to end-Q1 2013, the highest year-on-year increase since Q2 2009, based on figures released by the Bank of Thailand (BOT), the country’s central bank.
The condominium index which soared by 9.39% (6.1% inflation-adjusted) is actually a more relevant index. Condominiums are what Bangkok people tend to live in (and foreign buyers). The longer-established detached houses index may over-represent the rural population.
Likewise, the price of other property types and land also increased during the year to Q1 2013:
• The price index for townhouses rose by 6.86% (3.64% inflation-adjusted)
• The residential land price index increased by 4.85% (1.69% inflation-adjusted)
Property demand is rising fast. Total transactions by value, including both land and buildings, skyrocketed during the year to Q1 2013 by 35.3%, to THB219 billion (US$7 billion). 64% of all these transactions took place in the Central region.