Housing developers like the look of 2018

Housing developers like the look of 2018

The housing market is expected to thrive this year, driven by government spending on megaprojects and growth in tourism and exports.

According to Atip Bijanonda, president of the Housing Business Association, the housing market is forecast to end the first quarter with a 5% rise, driven by large developers that still dominate the market and the continued launch of new projects.

“Newly launched projects from large developers can attract homebuyers,” Mr Atip said. “Their financial status is very strong, while small and medium-sized firms still struggle and most of them have only existing projects.”

He said the luxury market this year may slow by 30% after demand was absorbed in past years. Sales of units priced below 5 million baht will continue to grow.

The association and two other real estate groups, the Thai Real Estate Association and the Thai Condominium Association, kicked off the four-day House and Condo Show Thursdayat Queen Sirikit National Convention Center.

The associations expect sales of more than 4 billion baht from the show and more than 8 billion baht after the event.

One of the key drivers will be a relaxation of bank mortgage rules, helping prospective homebuyers get mortgage loan approval more easily than before, while interest rates are still low and tend to be steady.

Somnuek Tanthathoedtham, senior executive vice-president of SET-listed N.C. Housing Plc, said the residential market in Greater Bangkok and major provinces keeps growing, while the three provinces of the Eastern Economic Corridor zone will be driven by foreign buyers.

“Interest rates this year will rise in the second half by 0.5 percentage points,” he said. “This may slightly weaken homebuyers’ purchasing power, but no major impact will be seen because interest rates are still low today.”

The overall property market was estimated at 406 billion baht worth of presales in 2017.

According to the Home Builder Association, the homebuilding market in the first two months saw growth as consumer confidence improved in line with economic activity boosted by exports and tourism.

The time to make a decision also improved from 3-6 months to 1-2 months. Buyers in this period were business owners and younger people who used inherited land plots to build a house.

Locations with strong sales included Greater Bangkok and key provinces like Chiang Mai, Nakhon Ratchasima, Chon Buri and Songkhla.

The Home Builder Association expects a rise of 3% in housing prices in the second half because of an increase in construction materials prices driven by demand from infrastructure projects.

The association expects 5% growth in the homebuilding market to 10 billion baht this year.

Major segments will be units priced at 2-5 million baht (45%), followed by 5-10 million baht (30%) and over 10 million baht (25%).

Commerce Minister Sontirat Sontijirawong said the 2018 economic outlook is expected to continue to improve on many positive factors, including export growth, tourism expansion, improving prices of agricultural products and the government’s investment in transport networks.

“These factors will boost consumers’ purchasing power, particularly for those in provinces,” he said.

Source: Bangkok Post

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