Thailand’s property market is expected to remain stable, with the housing sector in Greater Bangkok starting to show signs of saturation, according to the SCB Economic Intelligence Center (EIC).
EIC analyst Alisa Tamprasirt told the Bangkok Post while the rising home prices of the last four years have raised fears of a possible bubble, prices should not be taken as the only cause of the bubble.
“A real estate or property bubble is characterized by rapid and continued increases in valuations of real property, causing speculation,” Tamprasirt said. “But it’s difficult to classify which demand is real and which is speculation.”
Tamprasirt said the Thai property market did not heat up as feared in the 2008-11 period as opposed to the pre-crisis situation of 1993-96.
The recent rise in home prices was driven by the country’s economic growth, persistent low interest rates and higher costs for construction and land.
But the combined growth rate for all four years was just 4 percent, deemed comparatively low versus 15 percent for 1993-96.
Today’s housing demand is more stable than in the pre-1997 period, Tamprasirt said.
The condominium sector bears watching, however, as the Bank of Thailand’s condo price index has risen by a total of 33 percent over the past five years, the newspaper reported.
The increase in condo prices has been fuelled by higher costs and demand for access to mass transit as well as speculation stemming from high liquidity.
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