Bangkok property market bucked downward trend in 2013
January 10, 2014 00:00 By The Nation
While most economists expect Thailand to post 2013 economic growth of less than 4 per cent and are now revising 2014 forecasts downwards, because of lacklustre exports, rising household debt and declining consumption and investment, Bangkok's property mar
“The Bangkok property market finished strong in 2013 despite unfavourable conditions throughout much of the year. Demand across property sectors was robust, as reflected by both steady growth in selling prices and rents, as well as the successful introduction of new supply,” Suphin Mechuchep, managing director of the real-estate services firm, said yesterday.
Last year, most new condominium projects were well received. Those located near existing and under-construction mass-transit stations enjoyed the highest presale rates. Prices continued to rise, although more slowly than in 2012, because of stiff competition as plentiful supply remained in the market.
Commercial property performed well, as limited supply and strong demand drove occupancy rates and rents to all-time highs in the office market, while the prime retail market is experiencing near-record-high occupancy and rent levels.
Office occupancy reached 90 per cent while rents have been increasing for nine quarters. In the prime retail market, occupancy is above 94 per cent while rents have been increasing for 13 quarters, largely because of limited supply and strong demand from both local and international retailers.
“Strong fundamentals helped save the Bangkok property market in 2013. But at this point, it remains hard to predict where the market is heading in 2014,” Suphin said.
The major concern is the political turmoil, with developers, owners, investors and occupiers becoming more cautious or adopting a wait-and-see approach. Some developers and owners have become reluctant to invest in marketing and promotional campaigns.
“Though experience from previous bouts of political unrest that Thailand has faced over the past decade suggests that short-term impacts from individual incidents of unrest on the property market have been limited, there has been longer-term uncertainty created by these events, as is evidenced by the fact that growth in Thailand’s foreign direct investment has not kept pace with its Asean neighbours in recent years,” she said.
“With all eyes on elections scheduled for February 2, the most important factor in the outlook for 2014 is how quickly and smoothly the current political situation is resolved.”