There are signs the Bangkok property market will improve next year, along with the recovery of the country's economy and an increase in buyers' confidence, research by international property consultant CB Richard Ellis indicates.

However, the reserve requirement on short-term capital inflows, newly imposed by the Bank of Thailand,

may affect foreign direct investment in the property market, said the agency's managing director, Aliwassa Pathnadabutr.

The property consultants said that this year, the Bangkok property market faced a number of negative factors and challenges, including political uncertainty, a weaker domestic economy and reduced consumer confidence.

The office, hotel, apartment, retail and serviced-apartment sectors performed well as a result of limited supply, while the housing and industrial markets performed poorly compared with last year, due mainly to weaker confidence from local and international buyers.

Condominium developments in good locations performed well, especially the mid-market sector.

Aliwassa said next year's expected improvement in the property market would be boosted by modified regulations on taxation, visa requirements and foreign-ownership restrictions on residential property, as well as better, more competitive incentives and fewer bureaucratic hurdles for the industrial sector.

A clearer political situation and reduced oil prices and interest rates should improve the domestic economy and consumer confidence.

CB Richard Ellis believes many developers will continue to concentrate on lower and mid-range products, which will result in greater competition in this sector next year.

The agency's research said the Bangkok condominium market slowed during the second and third quarters of this year, due to political uncertainty, but gradually picked up towards the end of the year.

This year, the total supply of condominium units in central Bangkok increased 11.8 per cent, or 5,048 units, down from 12.4 per cent last year.

The majority of new supply was in the low-end to mid-market segment (below Bt60,000 per square metre), representing 36.8 per cent of the total, followed by the middle-to-upper range (Bt60,000-Bt80,000 per square metre) at 23.8 per cent, luxury units (Bt85,000-Bt95,000 per square metre) at 22.8 per cent and the top end (Bt100,000 per square metre and above) at 16.6 per cent.

The average occupancy rate for existing condominium projects in the inner-city area fell slightly in the third quarter from the same period last year, to 84 per cent, because of the newly completed units.

Seventy per cent of 13,347 condominium units being marketed in central Bangkok were sold as of this year's third quarter, up 0.7 per cent year on year. Low-end to middle-market condominiums close to Skytrain or subway stations performed very well.

Next year, CB Richard Ellis expects a slow-down in the number of new developments in central Bangkok, because it is becoming difficult for developers to find good land plots in prime areas.

There will, however, be a significant increase in new projects in such midtown locations as the Phaholyothin, Ratchadaphisek, Lat Phrao and Tha Phra areas.