Low-rise housing segment to see growth in 2017

Low-rise housing segment to see growth in 2017

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Townhouses priced lower than 3 million baht in Greater Bangkok and higher than 3 million along mass transit lines are expected to continue being attractive among homebuyers in 2017.

Surachet Kongcheep, associate director of the research department of property consultant Colliers International Thailand, said the two segments are considered a mass market which offers a secure income base that developers can rely on.

“The condo market depends on economic conditions more than the low-rise segment does,” he said. “The low-rise segment will continue expanding this year with an estimated growth of 15% in new supply.”

Low-rise housing segment to see growth in 2017

Visitors check out second homes and condominiums at a fair held in May 2016. Experts say that townhouses priced around 3 million baht will be attractive among homebuyers in 2017. Tawatchai Kemgumnerd

According to the consultant’s research, the number of new condos being launched in 2017 will total around 40,000 units, a slight rise from the 39,100 units launched in 2016.

Meanwhile, the number of new single houses and townhouses being launched in 2017 will total around 15,000 units, up from around 12,000 units launched in 2016. The tally in 2015 was the lowest in six years.

He said the housing market in 2017 will see the same rate growth as in 2016. Key factors influencing the market include the improving economy and better purchasing power.

“High household debt which caused banks to reject many homebuyers’ mortgage applications in 2016 may decline in 2017, due largely to the expiry of the five-year lock-up period for the first-time car buyer scheme,” he added.

One of the major factors helping improve the economy and consumer confidence is government spending on infrastructure.

Mr Surachet said there were many negative factors since early 2016. The economy was sluggish as exports declined another year. Private sector investment slowed while many of the government’s megaprojects were delayed.

GDP in 2017 will grow higher than the 3.4% estimated by the Finance Ministry if the infrastructure projects move on. This will also help stimulate private sector investment which was delayed in 2016.

“Many new condo projects were put on hold during the mourning period from mid-October to mid-November. However, many projects were launched in late November to December.”

As a result, the number of new condo supply launched in the fourth quarter totalled 17,000 units, the highest in the past several quarters. This means the total number of new condo launches in 2016 grew 13% from 2015, compared with an earlier expected decline of 10%.

Mr Surachet added most of the new projects launched since mid-November were units priced higher than 100,000 baht per square metre as developers lacked confidence in the lower market segment.

Source: Bangkok Post

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