Property bubble not about to burst

Re: "Supachai sees signs of a bubble", March 16.

Is the bubble in the Thai property sector, as forecast by former deputy premier Supachai Panitchpakdi, real? Everything is "bubbly" when property is traded at values inflated far higher than intrinsic values. Intrinsic value is a fundamental value (not market value) that can withstand the volatility of the market in the present and the future.

So, is Thailand's property sector in a bubble? That depends on location. Though prices for land and condominium units next to the BTS stations are at an unprecedented plateau and are referred to by many as "bubbly", their intrinsic value is unlikely to be lower than the value now paid. This is based on future prospects and the experiences of many capital cities with mass-transit stations. The bubble is likely to be around more isolated developments, though relatively cheap, but with less prospect of demand and growth.

"Location, location, location" is still the maxim that no good investor can ignore.

Songdej Praditsmanont

Bangkok