THE RESIDENTIAL, office and retail property markets in Bangkok and the provinces are expected to recover in the second half of the year, with confidence now returning following the coup on May 22, according to research by property agency Colliers Internat
Meanwhile, some 20 per cent of its clients’ new investment projects have been delayed following the coup, executive chairman Simon Landy said yesterday.
Many developers had decided to delay their investment decisions since late last year because of concern about the country’s political problems, and – even though the political situation is now more stable – some of them still prefer to wait and see whether the economy will recover following the junta’s announcement of its economic road map, he said.
That said, 80 per cent of Colliers’ residential customers are continuing to develop projects in line with their business plans, he added.
Landy said all of the company’s foreign clients that already had experience of investing in Thailand remained confident about expanding their investment, and that demand for luxury villas was still growing in Phuket.
However, foreign investors that have never invested in Thailand before, but were planning to do so, have continued to delay their investment decisions and are in wait-and-see mode, he said.
At present, the company is advising its business customers in the development of Bt10 billion worth of property projects, some 70 per cent of which is for condominiums and the remainder for office and retail.
The company’s associate director for research, Surachet Kongcheep, said the condominium market looked set to recover in the second half of the year, after new condo projects launched in Bangkok in the first five months came in at just 16,617 units – down 21.6 per cent from the same period last year.
New condominium launches in the first two weeks of June totalled 7,000 units, with up to 40 per cent of their overall project value already having been sold.
This means that property firms have regained confidence to launch condominium projects after most of them had delayed doing so in the first quarter, he said.
Associate director Suchai Kooakachai added that residential demand in Hua Hin was continuing to grow, especially when compared with other tourist destinations.
“Limited availability of land located close to Hua Hin beach has boosted land prices from an average Bt4 million per rai five years ago to Bt20 million now,” he said.
Other tourist destinations such as Pattaya, Chiang Mai, Khao Yai and Phuket are still witnessing only slight growth after demand from foreign buyers dropped, he added.
Meanwhile, developers are concerned about commercial banks’ tight restrictions on the provision of mortgages to customers.
Surachet said that with most residential transfers to customers taking place in the second half of the year, property firms would be directly affected if the banks continued with their tighter lending criteria and rejected housing-loan applications at the current rate.
Developers would in those circumstances be unable to generate sufficient income, and would have to resell their projects, he added.
Meanwhile, the overall office and retail sector continues to experience stable growth, said Surachet.
Office demand has continued to grow by an average of 5 per cent so far this year, although some foreign firms have delayed expansion of their office space.
The supply of office space in Bangkok remains limited, he added.
As to retail property, developers have continued to expand their investment in retail space this year.
Up to 700,000 square metres of new space will be completed and available for business use in the second half, indicating that demand for retail space remains despite only slight economic growth this year, said Surachet.