PROPERTY
MARKET: Housing boom continues to
gather pace
Published on Aug 20, 2003, the Nation
Reivew
The value of the property market this year
will exceed Bt64 billion for the first time
since the beginning of the Asian financial
crisis in 1997, according to propertydeveloper
Agency For Real Estate Affairs.
Agency said it expected the market to
be worth Bt74.74 billion by the end of
the year compared with Bt64.61 billion
at the onset of the crisis.
In the first half of this year, the
value of the property market stood at
Bt42.81 billion from the sale of 19,916
units in the Bangkok Metropolitan area
alone.
Managing director of Agency Sopon Pornchokchai
said that housing demand had continued
to grow by 30,000 to 40,000 units a year,
depending on price and loca¬tion.
According to research by the company,
the top five prime locations in and
around Bangkok for homebuyers are Rangsit,
Chaeng Wattana, Bang Bua Thong, Hatairat
and Sukhapiban 2 and 3.
The main reasons given for choosing
these locations were good transportation
and proximity to their places of work.
The survey was conducted on visitors
to five home exhibitions in Bangkok during
the first half of the year.
The increase in demand is mainly seen
in the luxuryhousing segment, which has
prices ranging from Bt3 million to over
Bt5 mil¬lion per unit, said Sopon.
Projects in this sector, he said, had
kept their value unlike lowerpriced projects
– up to Bt1.5 mil¬lion in value – which
saw a decrease.
He said the company had researched the
present value of luxury houses bought
in 1992 and found that the market value
of some had increased up to 107 per cent
by 2002.
Meanwhile the value of lowerpriced housing
dropped at least 30 per cent from its
1992 value.
In other words, luxury houses hold their
value better than lowerpriced houses,
he said.
Sopon said that according to his firm's
research, in the first half of the year
93 per cent of homebuy¬ers had bought
for themselves while 7 per cent planned
to speculate.
He said that this was better than in
the year before the crisis, when 40 per
cent of buyers bought for speculative
purposes.
This means that there was real demand
in the market, he said.
However, prices are set to increase
in the next two or three years in line
with the price of con¬struction materials,
which have increased by 40 per cent since
2001.
He said that propertydevelop¬ers could
not increase their house prices now because
of increased competition from a number
of landdevelopers.
But prices will increase if the property
developers cannot generate profit from
their business.
Recently Anant Aswabhokin, president
and chief executive of Thailand's largest
landdeveloper Land and House Plc said
that house prices would not increase
because of stiff competition.
Anant said he also believed that the
current property market boom was not
a bubble like that of 1995, which finally
burst in 1997.
With the booming market, Golden Land
Property Development Plc, a small propertydeveloper,
said yesterday that it expected to double
its net profit this year.
“It's a good time for us to be aggressive,”
said executive director of business development
Phongchai Kunakornporamut.
The company also expects profit next
year to grow by almost 100 per cent due
to big projects, he said.
Golden Land reported a 78percent rise
in net profit for the first half of this
year to Bt207.6 million.
The net profit for the whole of 2002
was Bt252.6 million.
Last week a number of propertydevelopers
who listed on the Stock Exchange of Thailand,
recorded net profit growth of at least
20 per cent in the first half of this
year compared with the same period of
last year.
Land and House was one such success,
posting a net profit of Bt2.7 billion,
a rise of 75 per cent.
Meanwhile Lalin Property Plc recorded
a net profit of Bt256 million, a rise
of 58 per cent.
All of these firms have expanded business
by targeting the luxuryhousing segment,
which includes single houses and condominiums.
Somluck Srimalee
The
Nation |
