In Retrospect - GHB Warns Of Oversupply In Budget Condominiums (Dec 2006)

Recently Sleuth came across a 6 month old article in the papers... are we heading for a bubble in the budget condominium sector now? Have a read and try to figure it out yourself.

GHB Warns Of Oversupply In Budget Condominiums (Dec 2006) - May Propose Leasehold Extensions

The Government Housing Bank (GHB) has warned of an oversupply in budget condominiums in the next few years as the number of high-rise housing construction permits has more than doubled. GHB president Khan Prachuabmoh said there was a great number of new budget condominium developments this year as homebuyers hoped to secure places near mass transit lines.

''But it has not yet reached a new bubble,'' Mr Khan said. ''Buyers should be more selective and choose a reliable developer.''

According to statistics released yesterday by the Real Estate Information Centre (REIC), the number of high-rise housing construction permits in the Greater Bangkok area totalled 895 buildings in the second quarter of 2006, rising by 162% quarter-on-quarter and 91% year-on-year.

Meanwhile, the total area of high-rise housing construction permitted in the Greater Bangkok area was about 4.93 million square metres, up 133% quarter-on-quarter and 483% year-on-year, said Mr Khan.

The number of high-rise housing construction permits nationwide totalled 1,045 buildings, up 129% from the first quarter and 28% from the same period of 2005, with a total area of 5.21 million sq m. That's a quarterly increase of 117% and an annual increase of 358%. As of the third quarter of 2006, the number of newly registered houses in Greater Bangkok totalled 24,276 units, up 16% from the second quarter.

Mr Khan also expressed concern about the construction of too many single houses priced at more than five million baht a unit, as market demand was moving down to lower-priced units.

During the first nine months of the year, there were 60,734 units newly registered in the Greater Bangkok area, a 14% increase from the same period of 2005. Of those, 11,004 units were single houses, a 3% decrease from the previous quarter, followed by townhouse and shophouses with 6,573 units, a 111% quarterly increase.

''The good news for investments next year is a downward trend in oil prices, interest rates and inflation. Politics will be clearer as a draft constitution is expected to finish within next year,'' he said.