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Thailand Property Aided by Falling Oil Prices

By on Jan 20, 2015 in Property News

The continuing fall in oil prices will boost homebuyers’ purchasing power and slow down an increase in housing prices. Atip Bijanonda, president of the Housing Business Association, said falling oil prices created two positive factors: lower costs of property development and higher purchasing power.

“Lower land development costs will make prices of low-rise housing including single houses and townhouses rise at a slower pace of only 3-5% compared with the usual rate of 5-8%,” he said. Mr Atip estimated an increase in condo prices this year of 8-10% as development costs also depend on labour, financial and land costs, which are not on a downward trend like fuel.

The Real Estate Information Center yesterday reported the housing price index in Bangkok, Nonthaburi, Samut Prakan and Pathum Thani in the second half last year, showing condos posted the highest year-on-year increase at 5.2%, followed by townhouses (3.7%) and single houses (3.1%).

The highest increase in condo prices was in the price range of 80,001 to 120,000 baht per square metre in Bangkok, with an increase of 6.5%, followed by the price range of 50,001 to 80,000 baht per sq m in Bangkok at 5.9%.

The highest increases in condo prices in Bangkok were in Huai Khwang, Chatuchak, Phaya Thai, Ratchathewi, Pathum Wan, Sathon, Bang Rak, Watthana, Klong Toey, Phra Khanong and Bang Sue districts.

In Nonthaburi and Samut Prakan, the highest increases in condo prices were in Muang district of Nonthaburi where the Purple Line is being constructed and Muang district of Samut Prakan where an extension of the skytrain runs.

Mr Atip said the property market this year will grow 8%. However, it will depend on the government’s ability to create a better economic outlook.

Thongma Vijitpongpun, chief executive of SET-listed developer Pruksa Real Estate Plc, said the overall economy looks better and the property market will be in a better trend than last year.

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