AREA managing director Sopon Pornchokchai said yesterday demand for new houses continued to grow but that prospective home-buyers had hesitated during the third quarter.

"Buyers have been concerned about political uncertainty and the higher cost of living as a result of rising interest rates and fuel prices," he said.

A survey by AREA showed the property market's value this year should drop 6 per cent from last year. This is because home-buyers' budgets for new houses are expected to drop from Bt3.08 million per unit to Bt2.7 million.

However, the research showed condominium projects near mass-transit systems, especially the Skytrain on Sukhumvit Road and the subway along Ratchadaphisek Road and around Lat Phrao, enjoyed strong growth.

Sopon said half the buyers of condominium projects would buy them for renting out, which would generate average returns of 8-10 per cent a year.

He added that prime locations for housing projects were the Sukhumvit, Srinakarin-Udomsuk and Klong San areas, because they were near mass-transit systems. Almost all projects in those areas are condos.

Meanwhile, the Rattanathibet, Lat Phrao and Pattanakarn areas are prime locations for detached-housing projects.

Sopon said most property developers had to downsize their projects and focus on homes priced less than Bt5 million per unit for detached-housing projects and less than Bt3 million for condominiums.

Kiatnakin Bank Plc managing director Tawatchai Sudtikitpisan said after the research results were presented yesterday that the property market saw only slight growth in the first nine month of the year, because home-buyers had been concerned about the future.

However, after signs that interest rates and oil prices will fall during this quarter, the property market's growth will improve, during both this fourth quarter and next year, especially in regard to projects developed by property firms listed on the Stock Exchange of Thailand. Home-buyers will tend to trust listed firms and shun smaller property companies.

Meanwhile, most commercial banks remain strict about providing new loans for small and medium-sized property firms and prefer companies that are listed on the stock exchange.

Tawatchai said that as a result, listed property companies had an advantage over the small and medium-sized companies, which were outside the stock market.

The research ranked Supalai Plc at the top of the property firms offering new property projects, with 3,624 units and total market value Bt6.3 billion in the first nine months of the year.

It was followed by Preuksa Real Estate Plc, with 3,580 units and total value Bt4.1 billion, and LPN Development Plc, with 3,476 units and total value of Bt5.8 billion.

Somluck Srimalee

The Nation