Thailand safe from property bubble, says banker

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BANGKOK, May 8 – Thailand’s property market remains secure without any sign of a bubble or oversupply, according to the executive vice president of Kasikorn Bank.

Chatchai Payuhanaveechai said 102,000 new housing units were built last year, a 19 per cent increase year-on-year, while 107,000 units were sold in the same period, representing a 30 per cent increase.

A total of 129,000 units were unsold last year, lower by 4 per cent from 2011. From 2009 to 2011, 130,000 units were unsold each year.

He said the higher housing prices were due to surging costs at 12 per cent since the second quarter of last year with prices of single houses increasing by 3 per cent, townhouses by 2 per cent and condominiums by 6 per cent.

Higher labour costs and land prices in Bangkok and the outskirts, particularly land near the Skytrain, have resulted in escalating housing prices, he said.

Non-performing loans for houses below Bt5 million have decreased from 2.4 per cent in 2011 to 2.3 per cent last year.

The purchase ratio of houses below Bt5 million is 30 per cent with cash and 70 per cent with loans while acquisitions of houses above Bt5 million by cash and loans are equal.

He said the country’s property market will grow this year with overall housing loans at Bt2.45 trillion, a 8.5 per cent increase from last year.

Personal non-performing loans are predicted to amount to Bt280 billion this year, 11 per cent higher than last year, he said.