Despite widespread concern of an oversupply in the condominium market, a property bubble remains impossible, says Suphin Mechuchep, managing director of the property consultant Jones Lang LaSalle Thailand.
“The Thai property market is active, particularly condominiums in inner Bangkok, despite domestic political problems and sluggish Western economies,” she said at the Post Today Investment Expo 2012, which runs until tomorrow at CentralPlaza LardPrao.
“Thai property prices are one-tenth those in Hong Kong and Singapore, while the Thai economy remains strong and people have cash on hand. Property purchases are a way to compete with inflation, especially if its an investment for rent.”
Some 25,000 condominium units were launched last year, which discounts the likelihood of a bubble, said Ms Suphin.
As Japan’s economy suffered last year, some 20,000 to 30,000 Japanese staff were sent back to their home country.
Although the condo rental market slowed, condos in inner Bangkok with good facilities fared well, she said.
Hot locations for property investment included Sukhumvit Road from Sois 1-63, which generated the highest rent. Other favourable locales were Narathiwat, Charoen Kung and Chan roads due to fewer competitors.
The new BTS extension into Bang Na district attracted many developments, although return on investment for a condo unit there was lower than on Sukhumvit Road between Sois Nana and Ekamai, which boasts 3-3.5% return a year.
Condos on Phahon Yothin, Ratchadaphisek and Lat Phrao roads are 60,000 to 95,000 baht a square metre.
The opening of CentralPlaza Grand Rama 9 and development of a new SET building on Rama IX Road makes that area ripe for more condominium growth.
Ms Suphin said last year’s flooding was comparable to the 2004 tsunami that caused a property price decline for a period, but now prices in Phuket have more than doubled their pre-tsunami level.
She acknowledged the government should have a clear flood prevention plan with a quick response to support the market for low-rise properties.