Thailand’s property market remains secure without any sign of a bubble or oversupply, says one executive vice president at Kasikorn Bank.
Chatchai Payuhanaveechai said 102,000 new housing units were built last year, a 19% increase year-on-year, while 107,000 units were sold in the same period, representing a 30% increase.
A total of 129,000 units were unsold last year, an amount 4% lower than 2011. From 2009 to 2011, 130,000 units went unsold each year.
He said that higher housing prices were due to surging costs.
Higher labor costs and land prices in Bangkok and its outskirts, particularly land near the Skytrain, have resulted in escalating housing prices, he said.
Since the second quarter of last year, prices of single houses have increased by three percent, townhouses by two percent and condominiums by six percent.
Non-performing loans for houses below THB5 million have decreased from 2.4 percent in 2011 to 2.3 percent last year.
The purchase ratio of houses below THB5 million is 30% with cash and 70% with loans, while acquisitions of houses above THB5 million by cash and loans are equal.
Chatchai said the country’s property market will grow this year with overall housing loans at THB2.45 trillion, an 8.5% increase over last year.
Personal non-performing loans are predicted to amount to THB280 billion this year – 11% higher than last year, he said.
