10 Percent Growth of Real Estate Market Foreseen; Optimistic Firms to Launch 216 Housing Projects This Year
The year 2012 saw a growth of 5 to 10 percent in the Thai property market; this year, the real estate industry is predicted to grow at much the same rate. The robust health of the industry is, undoubtedly, encouragement enough for developers throughout Thailand to plan the launch of an estimated 216 housing projects, all to be completed before the year 2013 ends.
REIC: Property Market to Maintain 5 to 10 Percent Growth
According to the Real Estate Information Centre or REIC, the real estate industry will see a growth of about 5 to 10 percent in the year 2013. This projection was made in light of the number of residential projects to be launched in the capital as well as the provinces, including Mukdahan, Nong Khai, Ubon Ratchathani, and Udon Thani.
The REIC also believes that the provinces situated near the neighboring countries will see much development in the way of real estate. Residential demand around these areas is expected to become greater, from both foreign and local investors who want to cast their nets wider to include Laos by the year 2015. That is when the Asean Economic Community takes effect. As a result, land prices in the said provinces have more than doubled in certain regions since the start of 2012.
Year 2013 to see 216 Newly Launched Housing Projects
Property development firms are launching no less than 216 housing projects within this year. The total value of those investments are projected to reach a sum of Bt150 billion. This amount, based on a survey done by The Nation, is just the cost of the developments themselves. The land on which these projects will rise will require a capital that’s worth roughly the same amount. Fifty percent of the overall Bt300 billion will reportedly be funded from the property firms’ inflow of cash, while the remaining fifty percent will be furnished from bank loans and debentures.
Prasert Taedullayasatit, Director and Chief Business Officer of Pruksa Real Estate, divulged that the firm is aiming to launch 78 residential ventures this year, all amounting to a sum of Bt54.6 billion. As much as 70 percent of these projects will involve the construction of townhouses and low-rise detached housing, with the remaining 30 percent devoted to the development of condominiums. A combination of debentures, bank borrowings, and cash flow will be used to fund these projects. Pruksa’s 2013 revenues are expected to be 30 percent higher than those of the previous year.
With over 50 residential projects to be launched in 2013, another leader in real estate, Sansiri, is planning to invest over Bt40 billion towards property development. Money to support these projects will come from Sansiri’s cash flow as well as from the issuance of a debenture. The firm’s President, Srettha Thavisin, says that growth in Bangkok and the provinces will boost business by as much as 10 percent greater than last year.
Even as the REIC predicts that the number of new condominiums to be launched in 2013 will be 4 percent lower than in 2012, Opas Sripayak, the Managing Director of LPN Development, said that demand for low-cost condominiums will continue to expand. The firm has 13 condominium projects, valued at more than Bt20 billion, in line for this year. The locations of these real estate developments will be in the Thai capital as well as provinces like Pattaya and Chon Buri. Finances will be backed by bank loans and the company’s cash flow. Firms such as SC Asset Corp and countless others are also launching a number of housing projects within this year.
So far, the year 2013 is looking good for the Thai real estate market. Confidence in the industry, as well as the economy, is at an all-time high.