High oil prices, inflation, rising mortgage rates and unstable politics are having a drastic effect on many housing projects far from the city.

In the eastern area where the new Suvarnabhumi Airport is preparing to open, however, a number of projects appear to be weathering the difficult conditions rather well.

A recent survey on the eastern suburbs from Srinakarin Road to Bang Na-Trat Highway by Golden Land's research unit found homes in the Bt3 million to Bt10 million range selling briskly.

The Bt10 million to Bt20 million segment fared less well while super luxurious homes in the Bt20 million-plus segment were the worst performers.

Western observers continue to be amazed by what could be so appealing about living near an airport, given such considerations as air pollution, crash landings and other falling objects that can dent roofs. Such fears make airport zones in most countries a no-go zone.

But in Thailand buyers throw such caution to the wind. The greatest density and supply of housing in Bangkok today is at Don Muang, Rangsit, where the current airport operates. Nor has unspeakable traffic at Bang Na and Srinakarin been much of a deterrent to buyers.

Golden Land's Nakara project off the Bangkok Motorway is selling about 7 homes a month with prices starting from Bt7.9 million. Its Grand Monaco project off he Outer Ring Road at Ban Na is offloading about 5 units monthly. The Monaco homes are priced from Bt8.5 million.

Meanwhile Golden Land's main competitor in this area, Land & Houses, has three projects. All are also doing well. Land & Houses' Mantana Kingkaew project sold 12 units in May with homes of about Bt5 million each.

The builder's Nantawan project off On Nut and Nantawan Rama IX site are also both securing more than six homes a month, said the survey.

Even so, Land & Houses last week announced that its yearly sales should produce flat results, which means areas outside the Suvarnabhumi zone are unable to draw the kind of buying that erupted after the local real-estate market staged a recovery in 2001.

Wanna Chasupatanakul, who heads the marketing for housing at Golden Land, said the industry faces higher construction costs and rising interest rates.

"These are external forces that are difficult to contain," she noted. "For Grade-A homes, the cost of construction is about Bt20,000 a square metre, almost double that a decade ago."

But for the meantime, the currency appreciation of the baht against the greenback has made imports cheaper. Even as petrol rises above US$70 a barrel, domestic importers are paying 10 per cent less as commodity prices are quoted in American dollars.

A cause for concern is that many of the suburban housing projects are massive. Nakara covers 267 rai and will contain 484 units while its Monaca project has 198 rai with 312 homes.

"We are able to sell because much of the infrastructure is completed," said Wanna. "The clubhouse, swimming pools, roads and several show homes have been crucial to getting customers to sign up."

Similarly, the Land & Houses projects use the same strategy to tap buyers.  Still, Wanna admits the speed of sales is far from the heyday of the property boom, and this will essentially mean that over time the cost of selling real estate will rise, as there is no certainty when the projects can be closed.

The Mantana Kingkaew project, for example, was launched in 2003 and still has 147 units left while the two Golden Land estates have yet to reach their halfway mark.

Perhaps when the noise level soars as jumbo jets arrive in droves on the once sleepy Bang Na suburbs another burst of buying may surge. Noise, pollution and crowds, one developer said half in jest, are for some local buyers measures of success. "They somehow believe these elements signify demand for property there has arrived and it is not easy to argue with that sort of view."

Itthi C Tan

The Nation