With Thailand’s ongoing political crisis in Bangkok and around Thailand, government spending for 2014 has been delayed, curbing the previously predicted annual increases in price for land properties. Since 2000, prices for land properties in Bangkok have steadily increased year over year by about 4.4%. This year however, land prices are expected to grow less than 3 percent; the lowest rate since 2010.
Contrariwise to the land market, Bangkok’s second-hand home market has continued to expand, and has been picking up speed as more developers start scaling back on projects for 2014. Certain areas in Bangkok are experiencing a higher demand for second-hand homes than others, with the greatest demand in inner-city neighbourhoods, including Bang Bua Thong and Bang Yai along the MRT’s Purple Line (that is currently under construction); and Ram Intra Road-Min Buri, which is served by a newly completed transport network.
While many aspects of the market aren’t expected to do as well as previous years, not all developers are scaling back. The real estate development company, Land & Houses Public Company Limited announced plans this week to issue a debenture worth THB 8 billion, with half issued in the first two quarters of the year. Seventy percent of the total will be used to pay back a debenture that expires this year, while the rest will support business expansion over the next two years. Capital raised from the debenture issue and property fund will be used to develop 21 new residential projects, including detached houses, condominiums and town houses, worth THB 35 billion this year.
In 2013, the Asia Pacific Real Estate Investment Market, which encompasses property funds and other asset acquisition vehicles experienced an increase of over 24 percent from 2012. Now in 2014, while the market is expected to remain active it is unlikely to increase significantly, as investors will become more apprehensive over high pricing, while the availability of assets for sale could act to constrain trade.