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Home sales rise as condos sag in first half
KANANA KATHARANGSIPORN
Friday July 25, 2008

The take-up rate of single houses and townhouses in the first six months almost doubled year-on-year due to government tax incentives and a mass transit kickoff, according to property consultant Agency for Real Estate Affairs (AREA).

Managing director Wason Khongchantr said pent-up demand from last year was stimulated by the tax incentives. Most homebuyers shifted to buy low-rise units instead of condominiums as they would get tax benefits before they expire on March 28 of next year.

Single houses sold in the first half of 2008 totalled about 9,000 units, rising from about 5,500 in the same period last year. Townhouse sales were around 10,000 units, up from 5,000.

On the contrary, condominium sales sharply declined from 20,000 units to 14,000 units. However, oil prices would be a positive factor boosting condominium sales in the second half of the year, he said.

Another positive factor boosting condominium sales would be a great shift of money from bank savings to real estate investment as the government changes its policy next month to only guarantee deposits of one million baht each.

''Condominiums are easy to invest in as buyers can rent it out. But new supply is restrained by higher construction costs, environmental regulations and stricter construction permission,'' he said.

During the first half of the year, real estate sales in Greater Bangkok totalled 37,000 units, up 16% from 32,000 units sold in the same period last year. AREA expected around 75,000 units sold in 2008, up from 65,000 in 2006.

''If there's no severe situation in the politics in the second half, the Bangkok property market will recover this year because of increasing demand as buyers will make rush decisions during an upward trend in construction costs and higher inflation rates,'' he said.

Another factor boosting the Bangkok property market would include foreign investment in real estate which should resume this year.

In the first quarter of 2008, foreign investment in the property sector in Bangkok totalled 17 billion baht, according to the Bank of Thailand.

Mr Wason anticipated that foreign investment would bounce back from 30 billion baht last year to 50 billion baht in 2008, the same amount as in 2006.

He said that he government's kickoff early in the year of the development of the purple mass transit line stirred demand in single houses and townhouses in Bang Yai and Bang Bua Thong areas.

There are a total of 1,335 residential projects with units remaining for sale. Those with over 20 units totalled 823 projects with a total of 408,594 units worth around one trillion baht or an average price of 2.626 million baht a unit.

Of the total, 299,420 units or 73% were sold. Residences remaining for sale in Greater Bangkok totalled 109,174 units, with 33,000 single houses, 27,000 townhouses and 35,000 condominium units.

Developers launched a total of 154 residential projects with 37,660 units worth 90.79 billion baht in the first half

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