Market sees good potential in H2

The property market shows signs of recovering in the second half of this year if the country’s political situation remains stable, Aliwassa Pathnadabutr, managing director of CB Richard Ellis Thailand, said in an interview with The Nation last week.
Since the red-shirt demonstration was broken up on May 19, the property market has steadily recovered and has picked up enough momentum to drive market growth in the second half of this year, she said, as most prospective home-buyers, especially domestic buyers, are now ready to buy residences.
Meanwhile, individual investors and property firms are lining up to buy distressed assets and undeveloped land, she said.
“Our customers alone have been buying distressed assets and undeveloped land worth between Bt200 million and Bt300 million a month,” she said
Some of these purchases are to be used to develop residential projects for sale, and some are for long-term investment, she said.
Aliwassa said the property market was showing strong potential to recover in the first quarter of this year, growing between 20 per cent and 30 per cent, but the market dropped in April and May when the political problems escalated.
However, since the demonstration ended, the property market has been recovering quickly, especially the condominium projects, she said.
Property developers among CB Richard Ellis’ clients plan to launch four new condominium projects worth over Bt7 billion in the second half of this year.
Meanwhile, other property developers also plan to launch new condominium projects worth more than Bt100 billion in the second half of this year.
The most popular locations for new condominium projects are those close to the mass-transit system. Condominiums with one or two bedrooms priced between Bt3 million and Bt10 million continue to enjoy strong demand.
Aliwassa said that the demand for condominium projects is now coming from domestic buyers and foreigners living in Bangkok, while demand from overseas-based investors is still weak.
Demand for residences at resort destinations Phuket and Kos Samui continues to be weak due to the lingering impact of the global economic crisis, she said.
However, she believed that demand in these locations would recover at the end of this year and early next year as the global economy recovers, as this market is focused on overseas demand.
As a result, the company is advising customers to launch new residential projects in these locations in the last quarter of this year. One will be a villa project located in the same area as Conrad Samui. This project will have just 30 to 40 units, priced at US$1 million (Bt32.4 million).
Demand for condominiums and villas in Hua Hin continues to grow strongly, meanwhile, thanks to solid domestic demand, Aliwassa said.
“Prices of Hua Hin land plots located close to the beach have doubled this year compared with five years ago, thanks to strong,” she said.
Land prices on the beachfront have increased from an average of Bt30 million per rai to between Bt60 million and Bt70 million per rai, she said.
Meanwhile, the office market in Bangkok remains stable despite the recent violence in the central business district (CBD), Aliwassa said.
She said demand for new office space this year is expected to increase by between 80,000 and 100,000 square metres, or between 30 per cent and 50 per cent, from average new demand of 50,000 square metres last year.
The new demand is coming mostly from existing firms expanding their office space, rather than from new firms entering the market, she said.
The supply of new office space, meanwhile, is only expected to increase by 100,000 square metres from this year until 2012, she said. The office occupancy rate in Bangkok’s CBD now stands at an average of 80 per cent, while, with some locations reporting occupancy above 90 per cent.
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