‘Delay condo launches,’ cautions REIC

Launches of new middle-market condominium projects should be slowed due to signs of an oversupply in the segment, says Samma Kitsin, director-general of the Real Estate Information Center.

Developers planning to launch new condominiums with units priced from 50,000 to 79,999 baht a square metre should put off or delay the launches to next year, he said.

“Uncertainty remains in the market,” said Mr Samma. “The global economy is unsteady and interest rates are on an upward trend.

A recent REIC survey found developers are planning to launch 60,000 condo minium units in the second half.

The REIC yesterday released its half-year condominium price index, which surveyed 100 condominium projects in Bangkok in March and April and compared prices with those in last year’s second half.

The condominium price index for all segments in the first half of this year was 101.43, up 1.43% from last year’s second half. The largest increase was in units priced between 50,000 and 79,999 baht a sq m, which rose by 3.42% to 103.42.

“The mid-priced segment is real demand. Investment or speculation is very slight,” said Mr Samma. “Buyers in this segment were less affected by the economic slowdown and political prob lems.” Developers of middle-market projects were able to control the market, so prices were rising higher than in other segments.

Meanwhile, the price index of units priced below 50,000 baht a sq m was 101.47, rising by 1.47%, as buyers are highly price-sensitive. In the high-end segment, with units priced from 80,000 baht per sq m, the index declined by 0.29% to 99.71 as most buyers were foreigners who were scared off by local politics and had their spending power clipped by the global economic crash.

“The index’s average growth of 1.43% showed a healthy, good market. A bubble will be signalled by double-digit growth in the index consecutively for three or four years like what happened in the US from 2001 to 2005,” he said.

The housing-developer sentiment index in the second quarter was at 49.9 points, the first decrease since last year’s first quarter and down from 59 in the first quarter of this year. Listed companies’ sentiment posted the largest decrease, from 67.6 to 53.7, while the index of non-listed firms dropped to 46.2, from 50.5.

The developers’ expectation index for the next six months was 68.9 points, up from 63.4, with listed firms at 77.5, up from 70.5, and non-listed firms at 60.3, up from 56.3.

“Most developers predict improvements in all factors except cost of development, which will be on an upward trend by year-end,” Mr Samma said.

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