Plunge seen in project launches in Bangkok and suburbs
March 27, 2014 00:00 By SOMLUCK SRIMALEE
THE NUMBER of new residential projects launched in Bangkok and its suburbs this year is likely to be between 25 per cent and 35 per cent down on last year's level, with developers deciding to delay many of their new projects, according to property experts
The forecasts reflect the country’s slowing economy, which is expected by some to expand by less than 3 per cent this year, and the fact that the political turmoil is now spilling over into the second quarter.
KasikornResearch managing director Charl Kengchon told yesterday’s “Mortgage lending in 2013 and Outlook for 2014” seminar, conducted by the Housing Finance Association, that the research house may revise its economic-growth forecast to below the current 3 per cent, as it was now likely that the country would not have a new government until the second half of the year.
Such a delay will impact directly on the Kingdom’s economic growth as the government’s budget for the fiscal year 2014/2015 will be delayed, while purchasing power has fallen following the continued rise in household debt, he said.
Slower growth will in turn negatively affect the property market and new mortgage lending this year, he added.
Meanwhile, KasikornResearch expects the residential market in greater Bangkok to see 75,500- 85,500 new units launched this year, some 35 per cent to 42.6 per cent lower than last year’s 131,550 homes.
Its research also found signs that residential transfers from developers to customers would drop by between 2.5 per cent and 9.4 per cent, at 130,000-140,000 units compared with 143,543 units last year.
Bangkok Bank’s research house, meanwhile, forecasts that new registrations and transfers this year will fall by between 2 per cent and 5.8 per cent, due to lower purchasing power.
However, the unit believes new mortgage lending will continue to grow by 3.9-6.1 per cent during the course of the year.
“Although new mortgage lending will still expand, the rate will be lower than last year, when growth of 10.9 per cent was recorded,” the research house said.
Chatchai Payuhanaveechai, executive vice president of Kasikornbank, told the seminar that the bank estimated new mortgage lending across the market would be worth Bt560 billion this year, up 6.5 per cent from last year, while non-performing loans would be maintained at 2.3 per cent of the combined value of outstanding home loans.
Mortgage lending will still grow because customers who put a deposit on a new home in 2011 |and 2012 can now have their property transferred to them, he explained.