Condominum Sales In Bangkok in 2011


There are a number of factors affecting the condominium market in Bangkok this year and also mixed signals.

There are mixed signals coming from the real estate market in Bangkok in terms of predicting what will happen with condominium sales in Bangkok in 2011. A number of factors are adding to this uncertainty although it doesn’t appear to be slowing down developers as the top 10 companies in Bangkok alone have over 200 projects planned for this year with half of them being condominiums.One of the key factors that could affect condominium sales is the recent central bank ruling that mandates a stricter loan-to-value ratio for condominium mortgages. The new cap of 90% was put in place to curb over-speculation in the market because of the central bank’s interest in avoiding any semblance of a real estate bubble forming.
Other factors that could weigh on the market include an oversupply of units and an end to some government incentives that have helped drive recent demand. Prices have spiraled upward in recent years in spite of the many forces that have influenced the local market here and the economy in general. This has not hurt demand but a combination of the above-mentioned factors plus the probability of higher interest rates may slow this pricing trend.
On the other side of the coin are the large number of projects that are being developed in the city and suburbs,Condominum Sales In Bangkok in 2011 Articles a number of which are to be located near the new Purple Line of the Skytrain, one of Bangkok’s two mass-transit train operations. Living close to the trains in Bangkok has been a prime motivator in housing sales in the last several years as traffic continues to be a problem in the Thai capital.
And, property developers themselves seem to be uniformly optimistic for this year, expressing the feeling that while things may slow slightly in the first part of the year due to the uncertainties about interest rates and the current oversupply, that in the long term the market will be robust and continue as it has for the past few years.Newspaper reports have put the take-up rate of condominiums at 40-50% in recent months compared to a fairly uniform 70-90% in years past. This has served to allay overheating fears somewhat but the 90% cap seems to be here to stay for the moment. However, this is a tool that the central bank can use at any time to fine tune the real estate market.  If sales slow and the possibility of a bubble recedes then the central bank can make changes as it sees fit to balance the situation.
Whatever happens in the next few months it appears as if the long-term prognosis is solid. There is active government involvement in the sector to prevent over-speculation. Local developers have viable and various projects planned and have the necessary financial resources to carry out their plans. And the banks have not over-extended themselves nor made shaky loans, one of the factors that led to the massive collapse of the U.S. real estate market. Time will tell but smooth sailing appears to be the forecast in Bangkok’s condominium market. 

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Author: Piyawut Sutthiruk

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