Mrs. Suphin Mechuchep, Managing Director of Jones Lang LaSalle in Thailand, comments: The Bangkok property market has proven resilient in 2006, affected only slightly by factors such as the political turmoil and higher oil prices as well as interest rate increases that Thailand experienced earlier in the year. Sustained demand was reflected by both steady growth in selling prices and rents, as well as the successful introduction of new supply in the various property sectors. The residential markets, particularly those for mid-to-low priced units, have remained generally healthy in the face of stiffer competition from new supply and more caution on the part of buyers. The commercial property sectors have performed well with low vacancies and rising rents.
Jones Lang LaSalle foresees a positive environment for the Bangkok property market in 2007. There are a number of factors that make us optimistic about next years outlook. Interest rates have remained stable over the latter half of this year and are not expected to jump significantly next year. Fuel prices have trended downward having peaked earlier this year, benefiting the overall economy and the property sector. Rising construction costs have moderated this year and are expected to remain flat in 2007, say Mrs. Suphin.
The mass-transit projects recently approved by the interim government, in particular, will have a direct and tangible impact on the Bangkok property market. These projects will boost government spending, resulting in more private sector employment and stimulating the overall economy. Areas which are currently not served by mass transit but for which plans are in the pipeline will present opportunities for new development once construction of those new mass-transit projects begins, she adds.
CONDOMINIUM MARKET: Medium priced projects more popular
Despite the completion and launch of more new supply, the condominium market has remained generally healthy in 2006. By the end of the year, forty one new condominium projects comprising 5,300 units are scheduled for completion in central Bangkok, bringing the total stock to 52,880 units. For projects which are already complete, the average sales rate has reached almost 100%.
Forty six projects comprising 16,000 units are currently under construction and scheduled for completion between 2007 and 2009, which will result in annual supply of roughly 4,300 units per annum. These projects have reported healthy sales with the average sales rate standing at over 70%.
Mr. Dan Tantisunthorn, Head of Research at Jones Lang LaSalle, says Concerns that a bubble in the condominium market has been developing over the past couple of years appear to have been overblown with demand and supply remaining in fair balance as evidenced for sales rates for both completed and under construction projects. The fact that developers in this market are more professional means that construction of new high-end supply has been moderated, in line with buyer requirements in terms of quality, location and price.
The recent shift in condominium development focus from the high-end segment to the mid price segment exemplifies this trend. The shift is a reflection of intensified competition in the high-end market. Prices in the high-end segment have risen to levels that are less attractive to investors who want to buy and offer the units for rent, he explains.
Mid price projects are expected to prevail in the condominium market next year, particularly those with easy access to the MTRA and BTS routes and their planned extensions. Key players in this market segment will still be L.P.N. Development, Plus Property Partners, Supalai, Sansiri and Asian Property Development.
Article Source: http://www.Article-Hut.com - Article Submission Service
** Attn Ezine Editors & Site Owners **
You may reprint this article in its entirety so long as you do not remove the article source active link or the authors links.
|
