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Published on March 25, 2008

The rate of construction has accelerated around the Kingdom. This is likely to continue, considering the number of registrations for new condominiums.

The rise, however, has aroused fears of an excess of supply.

The Bank of Thailand (BOT) said there were 19,090 new apartment and condominium units in the greater Bangkok area last year, up 20.5 per cent from 2006. However, this increase was sharply lower than the 138-per-cent rise recorded in 2006.

Last year, there were 25,988 condominium units registered nationwide, a 12-per-cent rise that was lower than the 75.3-per-cent increase in 2006. Assistant Governor Krirk Vanikkul said the condominium sector did not have an oversupply problem, considering the slow growth in the number of property loans issued by commercial banks. He said the increase in condominium construction might be due to a relaxation in regulations that allowed foreign investors to own up to 49 per cent in property companies.

"There is nothing to get excited about," he said.

The BOT said outstanding property loans totalled Bt1.1 trillion last year, up 11.4 per cent from 2006.

Lending for real-estate development contracted 0.3 per cent to Bt312.9 billion last year, while housing loans grew 1.93 per cent to Bt698.4 billion. Oversupply fears in the real-estate sector would proliferate if the number of property loans accelerated significantly. To monitor this, the BOT requires banks to report property loans worth more than Bt100 million per project regularly.

The rate of construction is expected to continue, because the issue of land-development licences rose 6 per cent to 20,669 last year.

Anoma Srisukkasem

The Nation