Bangkok Condo Market Spreading Outwards

Online, January 4, 2011 (Newswire.com) - Today the Bangkok Post reported that the city is "expected to have 236 kilometres of electric train lines and most railway crossings will be replaced by flyovers by 2015," with construction of the Purple and Red lines under way. Later in the year, construction of the Green Line will begin and the Pink Line "will be accelerated so construction can begin this year".

Moving forward to next year, work will be started on the Blue Line and the Purple Line and Bang Sue railway station will be upgraded to become the hub for most electric train services.

The report adds: "Under its 10-year electric railway master plan, the planning office foresees greater Bangkok having a combined 391km of electric railway lines by 2019 which will cover a catchment area of 525 square kilometres and serve 3.8 million commuters a day."

"The planning office expects all 12 electric railway projects for greater Bangkok to be completed in 2029. They will have a combined distance of 509km, cover a catchment area of 680 square kilometres and serve 5.1 million commuters a day."

The prospect of more commuters using these electric railways should hopefully relieve its. "nightmare" traffic jams and is likely to become very popular with condo buyers, especially where units are close to these new mass transit lines. The take-up and affordability of urban Bangkok is likely to be very high as a result.

After unrest in the city subsided in June 2010, confidence has returned to the market, with developers now looking to launch new projects. With small rises in interest rates they estimate that it is unlikely to have any significant or detrimental effect on the condo market and that it will boost to the dynamic in the condominium market.

Colliers International also predicted these trends that condominium projects for lower- to mid-range units will continue to be popular, and that the "big developers are also interested in entering this market."

A recent survey by Thailand's Agency for Real Estate Affairs (AREA), its president Dr. Sopon Pornchokchai said, "Of 103 condominiums completed last year in central Bangkok, of the total number of 40,000 units, 79 per cent were occupied.

Dr. Sopon indicated that in the survey there are no signs of oversupply in the Bangkok condo market, with its modest 21 per cent vacancy rate. He is quoted to have said: "The data we have doesn't show any signs of oversupply at the moment. However, we have to keep an eye on unfinished units, which might affect a number of supply in the market. If the new condo units keep coming up in a big amount, oversupply could be [reached] in two years' time."

The research document pointed to Ramkhamhaeng having the highest occupancy rate (91%), followed by Ratchada/Lad Phrao (86%), Phahon Yothin/Phaya Thai (83%), Sukhumvit Soi 1-69 (80%) and Sukhumvit Soi 71-103 (79%). The yield for Sukhumvit 71-103 was 12.2%.

On 4th January 2011, the Bangkok Post reported that the Stock Exchange of Thailand (SET) composite index opened up 9.55 points, or 0.92 per cent on Thursday's close, to stand at 1,042.31 points at the start of trading on Tuesday morning. The trade value was 2.59 billion baht.

RTTNews also ran a report suggesting that the Thai stock market had returned to action on Tuesday following a four-day break for the New Year's holiday and that the SET "finished just above the 1,030-point plateau, and now investors are looking forward to a sharply higher open when the market christens the new year". They added that the global forecast for the Asian markets is broadly positive, in the main due to positive economic data from the US, with property stocks expected to fuel the rally.

The continued influx of foreign capital into Thailand's bond and stock markets caused the baht's exchange rate against the dollar to appreciate rapidly last September after robust export growth.

With the Thai Ministry of Commerce's upward revision of the GDP growth, the dollar/baht exchange rate standing at Bt30/$ the government and the Central Bank are said to be allowing a gradual degree of baht appreciation. As there is no overt signs of an export deceleration, it is expected that the baht will continue to appreciate.