'Thailand real estate market could grow 5-10% this year'

Deputy Finance Minister Visut Srisuphan says 2016 will be a challenging year for real estate sector.

Thailand's real estate industry could grow 5-10 percent this year in spite of challenging external and internal factors.

"We project the condominium market will be flat or decline slightly this year, and the growth of the property sector will be driven by housing estates," Athip Peechanon, president of the Housing Business Association said, according to The Nation.

"We will see new property projects this year in only Greater Bangkok, and they will be in the hands of only big property players," he added, speaking in a forum on investment trends for the property industry.

Nowadays banks are extremely cautious about extending loans to small and medium-size property firms who don't have any clear development plans for a particular project.

The government's stimulus measures for the property industry resulted in the high delivery of housing units to buyers.

The consumers also accelerated the transfer of their property to benefit from the stimulus package. But now that the stimulus has expired, consumers might delay taking delivery of their properties.

Athip said that many condo projects are struggling from oversupply problems and it might last for at least a year. "However, there is still real demand for housing estates in many provinces as they are recognised as a necessary asset by consumers there," he added.

Prasert Taedullayasatit, president of the Thai Condominium Association, said: "The first four months of this year saw 13 per cent fewer launches of property projects, which were worth about Bt83 billion, from the same period last year."

By the end of this year, 10 major real estate developers will launch Bt220 billion worth of projects, mainly in Greater Bangkok. They are 67 condo projects, 92 townhouse projects and 74 detached-housing projects.

Wiwat Laohaphunrangsi, director of Areeya Property, said the developers had created demand in spite of having projects in hand and there was no need to launch any new project.

On the other hand, Deputy Finance Minister Visut Srisuphan said that 2016 will be really challenging year for not only real estate but all businesses.

"The drought will hurt the agricultural sector, and the high level of household debt is a sensitive situation that needs to be monitored very carefully," Visut said.