Property market on road to recovery

Public spending set to help sector's growth

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The property sector is expected to remain stable and reach a balanced point this year, with Greater Bangkok seeing continued growth while most provincial locations stay sluggish due to the stuttering economy.

Deputy Finance Minister Wisudhi Srisuphan said the property market would recover to a balanced point after growing in the first four months, boosted by property tax incentives that ended on April 28.

"Public spending of around 2 trillion baht in the remainder of the year will help drive the overall economy," he said. "The property market will have a gradual recovery with growth of 5%. Developers have a strategy to survive in a stagnant economy."

Samma Kitsin, director-general of the Real Estate Information Center, said it was not the first time that property tax incentives had been used to boost the economy.

"They were used three times and every time the market fell two months after the incentives ended. Then it resumed as usual," he said.

Prasert Taedullayasatit, president of the Thai Condominium Association, said the property market in the first quarter rose by 8% in Greater Bangkok and 11% in six key provinces.

"In Greater Bangkok the market will keep growing as it will be driven by new residential supply being launched until the end of the year and new mass transit lines including the Purple Line, which will start running, and many lines for which the government will open bidding," he said.

Mr Prasert predicted 250 billion baht in new residential supply from May to December by the top 10 developers. It will include 88 condo projects worth a combined 120 billion baht, 92 townhouse projects worth 52.6 billion and 74 single-house sites worth 76.6 billion.

Atip Bijanonda, president of the Housing Business Association, said the low-rise housing segment in the provinces would continue strongly but condos would remain poor due to drought and declining prices of farm products.

"Developers should be more cautious in investment as it is cloudy for the remainder of the year," he said. "They should ensure market demand before launching new projects."

Wijit Nimirtwanich, a technical officer at the Office of Transport and Traffic Policy and Planning, said the government would accelerate bidding for new mass transit lines this year in a bid to use infrastructure investment to boost the economy.

Lines include six routes with a total distance of 131.7 kilometres, representing 28.4% of mass transit lines.

They are the Red Line (Bang Sue-Hua Lamphong), Light Red Line (Phaya Thai-Makkasan-Hua Mak), Purple Line (Bang Sue-Rat Burana), Orange Line (Thailand Cultural Centre-Min Buri), Pink Line (Pak Kret-Min Buri) and Yellow Line (Lat Phrao-Phatthanakan-Samrong).

Surachet Kongcheep, associate director of property consultant Colliers International Thailand, said the property market this year might have stable growth or an expansion of no more than 5% as consumer confidence was weak.

"For investors and homebuyers, it's a good time to make a decision as developers are willing to offer attractive campaigns and discounts," he said. "But it's not the right time for short-term speculators as the economy is still sluggish."

He said condos remain attractive as an investment as they are driven by mass transit lines but investors or buyers should do a site survey before making a decision.

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