Samui Phangan Real Estate Magazine December-January

HOME PRICE GROWTH
MILDER AT PRESENT
Thailand's property market is expected to remain stable, with the
housing sector in Greater Bangkok starting to show signs of saturation,
says the SCB Economic Intelligence Center (EIC).
Developers are thus advised to study new opportunities in markets
upcountry or abroad.
EIC analyst Alisa Tamprasirt said while the rising home prices of the last
four years have raised fears of a possible bubble, prices should not be
taken as the only cause of the bubble.
"A real estate or property bubble is characterised by rapid and continued
increases in valuations of real property, causing speculation," she
said. "But it's difficult to classify which demand is real and which is
speculation."
Ms Alisa said the Thai property market did not heat up as feared in the
2008-11 period as opposed to the pre-crisis situation of 1993-96.
The recent rise in home prices was driven by the country's economic
growth, persistent low interest rates and higher costs for construction
and land.
But the combined growth rate for all four years was just 4%, deemed
comparatively low versus 15% for 1993-96.
Ms Alisa said today's housing demand is more stable than in the pre-
1997 period.
Mortgages are growing at 12% a year compared with a high of 25% a
year during the pre-crisis period.
Meanwhile, housing affordability is relatively high due to rising income
levels.
The housing supply does not show signs of overheating, as indicated by
the current gross domestic product (GDP) of the property sector, which
is growing by 3% a year on average.
In the pre-crisis period, GDP growth of the property sector stayed
relatively high at 10% a year.
The upshot is that property growth is in line with economic growth, Ms
Alisa said.
Source: Bangkok Post
samui phangan real estate 51