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Published on October 10, 2007

"Resale homes are cheaper and have the advantage of prime locations," said Khan Prachuabmoh, president of the Government Housing Bank (GH Bank), the largest local mortgage lender.

Last weekend's resale home fair showed that the market was picking up, with sales of resale homes and land jumping 31.7 per cent to Bt2.3 billion from last year's event.

Demand for homes priced under Bt2.5 million was high and townhouses were the champion, he said.

The resale market in the next two to three years would be very active and that would draw in more brokers acting as middlemen between home-owners and home-buyers.

The Finance Ministry is considering regulating the brokerage business to protect consumers and raise their confidence in the quality of resale homes.

According to the Real Estate Information Centre, 90,000 people visited the resale home fair, most of them looking for existing homes in the Bangkok districts of Phra Khanong, Lat Phrao and Bang Kapi.

Sales of townhouses represented 35 per cent of sales at the fair.

The real estate information centre at the fair took 47,877 enquiries, 32 per cent of which were for single family homes priced between Bt1 million and Bt2 million. Searches for townhouses priced under Bt1 million made up 31 per cent and those for condominiums going for under Bt1 million were 12 per cent. Only 7 per cent looked for land.

Almost half of visitors said they planned to buy a resale home in the first half of next year.

Sales of resale homes owned by GH Bank alone were Bt40 million and applications for GH Bank home loans at the fair reached Bt373 million.

Lower interest rates and tax incentives, which expire at the end of this year, also contributed to the market improvement, Khan said.

The overall property market in the third quarter has shown signs of recovery, indicated by more mortgage lending by GH Bank.

A price bubble might be forming in the condo market, as sales of condos are rising rapidly, he said. However, the picture of this market would be clearer within two years when developers demand down payments from those who book units today, he said.

GH Bank will raise funds via securitisation as planned, even though the offshore market is currently closed for bonds backed by mortgage loans, following the sub-prime lending crisis in the United States, he said.

Investors might want to buy asset-backed securities in nine months. If the bank has products to sell then, it would be much better than doing nothing now, he said. It takes about six to nine months to prepare for securitisation, he added.

Wichit Chaitrong

 The Nation