The value of new housing projects in the Thai capital rose by 64 percent in the first half of 2015 from a year earlier when business was hit by political unrest that led to an army coup in May last year, a leading property consultant said on Thursday.
But the pace is likely to slow in the second half, with the full-year 2015 growth expected at 30 percent due to fear of oversupply in some segments, Sopon Pornchokchai, president of the Agency for Real Estate Affairs told reporters.
Although the economy “is not getting any better, expensive housings are booming because those with higher income are not affected from an economic crisis at the moment,” Sopon said.
The value of new projects was worth 227 billion baht in January-June and is expected to rise to 449 billion baht ($12.93 billion) for the full year, helped by demand from wealthy buyers, he said.
He said cheap condominiums are also booming due to speculative purchases and demand from lower income people who are unable to afford expensive housing.
As the economy is slowing, and with shaky consumer confidence, already launched projects may be left unsold, Sopon said.
“There are fears of bubbles in detached homes worth over 10 million and cheaper condominiums of less than 1 million baht,” he said.
Thailand’s economy grew only 0.9 percent last year, with the political crisis bringing it to the brink of recession in the first half. The central bank recently cut its 2015 economic growth forecast to 3.0 percent from 3.8 percent, largely due to weak exports and subdued domestic demand.
Consumption, which accounts for half of gross domestic product (GDP), is only slowly picking up, curbed by high household debt levels. ($1 = 34.7300 baht)