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Housing projects get smaller

Newly launched housing projects in the first half of this year were smaller in size as developers looked to reduce risk, says the property consultant Agency for Real Estate Affairs (AREA).

President Sopon Pornchokchai said there were 233 newly launched projects in Greater Bangkok in the first half with 54,149 units worth 160 billion baht.

AREA expects 108,298 new units this year, down by 7.27% from 116,791 last year. It projects total value of newly launched units to be 319 billion baht, up by almost 6% from 302 billion.

Developers launched more projects but with fewer units than in last year's first half as they sought to avoid risk in selling, but figures still show a healthy housing market, said Mr Sopon.

He said the housing market next year should see 100,000 newly added units, based on 17% export growth for the country each year since 2009.

On the demand side, there were 48,825 units sold in the first half, up by 15% year-on-year.

Mr Sopon estimates 97,650 units will be sold for the full year, up by 2% from last year due to good conditions in the housing market.

Of the 1,317 residential projects surveyed, 955 had more than 20 units remaining for sale, an increase of 100 projects from last year.

There were also 78 projects with a combined 17,750 units worth 42.7 billion baht that froze sales activities, up by 23% and 24%, respectively, from Dec 31.

The main reason for the freeze was a lack of project loans, followed by unattractive products, unapproved environmental impact assessments, waiting for price adjustments, changes in project type, unattractive locations and legal disputes.

Mr Sopon warned of a housing bubble bursting in 2013 if 100,000 new units are introduced next year totalling 330,000 units for all of 2010-12, accounting for 7.2% of housing units in Greater Bangkok.

 

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