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Housing market demand for condos still strong

source: Nation October 22, 2008

Indicative index drops 1.2 points in Q3 but market has resilience yet

REIC Housing Developers Sentiment Index (HDSI) dropped 1.2 points in the third quarter after the economic turmoil, a survey by Real Estate Information Centre (REIC) showed.

The survey was conducted among 146 property developers of which 28 companies are listed with the Stock Exchange of Thailand.

REIC general director Samma Kitsin said the survey showed property developers are concerned about the economic slowdown and politiฌcal turmoil, both of which may have a negative impact as homebuyers may delay their decision to buy new residential projects.

Following the survey, HDSI for the third quarter was at 43.8 points, lower than the 45point mark recorded in the second quarter.

Listed companies in the SET posted a figure of 49.1 points on the HDSI in the third quarter, a drop of 1.8 points from the 50.9 points recorded in the second quarter of the year.

Meanwhile, HDSI for nonlisted company recorded 38.4 points in the third quarter, a drop of 0.7 point from 39.1 points recorded in the secฌond quarter of the year.

Samma said property developers' confidence dropped because they fear demand in the market will drop as homebuyers are likely to be concerned about future earnings.

However, most of homebuyers have continued to display confidence after construction costs dropped as prices of construction materials, especially steel and oil, come down significantly.

The research showed that demand for condominium projects has continued to grow, especially in the resale market in Bangkok, which recorded transfer of ownership rights for 25,550 condominium units in the first eight months of this year.

There was a growth of 31 per cent compared to the same period last year, half of them from new condominium projects and the rest from the resale market.

Samma said overall transfers were recorded for 40,357 units in the first eight months of this year, or a rise of 36 per cent from the same period last year.

Transfer of ownership rights in Chonburi province were recorded for 4,725 units in the first eight month of the year, or up 77 per cent from the same period last year.

This was followed by Rayong province, in terms of percentage growth, which recorded 598 units, or a rise of 67 per cent. Prachuab Khiri Khan province ranked third in terms of growth rate with 444 units, or a rise of 66 per cent.