Although the residential real estate market in Bangkok is showing signs of recovery, with 40 per cent more units launched in last month than in April, the market is expected to decline because of lower levels of purchasing in the first quarter. The construction business also looks set to recover by the second half of the year as delayed projects are being revived.
Since the coup, home buyers’ confidence has thankfully returned to the market but the belief is that the market will still drop over the course of the year, although this is an improvement on previous estimates. Although the market will recover by the second half, it will not be sufficient to make amends for the poor levels of purchase in the first half. Estimates suggest that property market valuation will be between Bt650 to Bt700 billion this year, below the city’s average of Bt800-billion.
Demand for properties priced at up to Bt5 million started to return for condominiums, townhouses and detached housing since the coup and up to 70 per cent of visitors to some developers’ project sites decided to buy over the past month, which is a sharp improvement on levels earlier in the year, when buyers delayed their purchasing decisions.
Now that the political environment has changed and the country is now more stable, many of these people have decided to return to the market. Meanwhile, the construction business also started to showing signs of recovery on the miltary’s announcement of an economic road map to develop the country’s road and rail infrastructure. This will drive the sector’s recovery, with many mega-projects launched during the second half of the year.
They had, up until recently adopted a wait-and-see approach but have now begun to expand their investment, especially when the Board of Investment kick-started the approval of new investments among those businesses applying for tax privileges and incentives. Demand for concrete has increased over the past two months when compared with the January-April period.
Most manufacturers that had delayed expansion are now ready to get construction under way and therefore need more raw materials to build their projects. Now that many of the government’s infrastructure projects have received the go-ahead and are to be launched this year, there was a boost in demand for construction materials.