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Uncertainty among Thai property developers

Rising construction prices and uncertainty over the government’s housing policy may affect the real estate sector significantly worry property developers.

Thailand’s business outlook is generally bright due to high consumer confidence in the second half and the real estate sector will remain active as developers launch a number of new projects, but Therdsak Theveeteeratham, a senior vice-president with Asia Plus Securities said the sector was still constrained by some negative factors that could affect sales.

His comments followed statistics from the Real Estate Information Center which showed new house registrations in the first half of the year declined 14 per cent y-o-y to around 46,300, while transferred units fell 23 per cent y-o-y to 88,200.

“In the first half of the year, the number of new launches was similar to last year, but the last couple months declined,” said Samma Kitsin, the REIC director-general.

According to the Bangkok Post, in greater Bangkok, 30,600 new low-rise units were launched in the first half, down 12 per cent y-o-y, while the number of condo units launched was at 27,800 representing a 15 per cent y-o-y decrease.

Mr. Samma explained the decline with rising inflation, higher construction costs and an unclear housing policy from the new government, especially regarding city planning.

New city planning rules which prohibits buildings higher than 23 meters in locations where the soi is smaller than 12 metres in width, concern some developers.

At a forum yesterday, the Thai Condominium Association (TCA) asked the Office of Natural Resources and Environmental Policy and Planning to clarify regulations and processing times for considering environmental impact assessment (EIA) reports, and to share the growing approval workload with other government agencies.

The Lands Department was also asked to amend sale-and-purchase agreements to allow sales activities even if construction permits are still pending, because this shortens the period to sell projects.

Source: Property Report

ThaiVest Editorial Team

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