Expanded mass-transit network a boon for developers
New mass-transit projects worth a total of Bt2.27 trillion will expand residential development from Bangkok's central business districts (CBDs) to suburban areas close to the new routes, Housing Business Association president Issara Boonyoung said yesterday.
However, the property market continues to face risks from rising land prices and a shortage of labour, he told the "Property Outlook 2013" seminar, organised by the HBA, the Thai Real Estate Association and the Thai Condominium Association.
"We believe property firms are trying to manage their business risk by finding new technology and expanding their new projects to new locations to cut their land costs, which are rising in the CBDs," he said.
Despite the business risks, Issara expects the property market this year will continue to grow by 5-10 per cent in Bangkok and suburban areas.
Meanwhile, property firms have a new business model for expanding investment in suburban provinces linked to the new mass-transit routes, following the government's policy to expand investment in mega-projects through 2023, he added.
Last year, new residential projects launched in Bangkok and surrounding provinces comprised 93,227 units, 22.4 per cent higher than the 2011 level. Some 63 per cent of the new units were in condominium projects.
Newly registered homes in Greater Bangkok came in at 112,915 units, up 37 per cent from the previous year. More than 60 per cent of the newly registered homes were in condominium projects.
RELIEF FOR CONDO DEVELOPERS
Thai Condominium Association president Thamrong Panyasakulwong said the market for new condo launches this year would be better than last year as the new Bangkok city plan, which comes into effect on May 15, will maintain the right to develop condos in roads and sois as narrow as just 6 metres.
"Most property firms had delayed their decision to buy land for developing condominiums in the CBDs because of concern that the city plan would change the rule. But they can now kick off their business after announcement that the same rule will be kept in the new city plan, which is awaiting Cabinet approval," he said.
Meanwhile, hospitality-related businesses such as hotels and retail outlets continue to show strong growth in line with the targeted number of 22 million foreign tourists visiting Thailand this year, Thai Real Estate Association president Kittipol Pramote Na Ayudhya told the seminar.
The office-building segment also shows signs of future strong demand in light of the Asean Economic Community coming into effect in 2015, having been on a stable growth path since 2008. "We believe the office market will recover in the next two or three years," he said.