Thailand now has a house price boom? The Thai price index for single detached houses rose by 4.63% (1.48% inflation-adjusted) during the year to end-Q1 2013, the highest year-on-year increase since Q2 2009, based on figures released by the Bank of Thailand (BOT), the country’s central bank.
The condominium index which soared by 9.39% (6.1% inflation-adjusted) is actually a more relevant index. Condominiums are what Bangkok people tend to live in (and foreign buyers). The longer-established detached houses index may over-represent the rural population.
Likewise, the price of other property types and land also increased during the year to Q1 2013:
- The price index for townhouses rose by 6.86% (3.64% inflation-adjusted)
- The residential land price index increased by 4.85% (1.69% inflation-adjusted)
Property demand is rising fast. Total transactions by value, including both land and buildings, skyrocketed during the year to Q1 2013 by 35.3%, to THB219 billion (US$7 billion). 64% of all these transactions took place in the Central region.
Total outstanding property credits rose by 13.3% during the year, to Q1 2013 to THB1.86 trillion (US$59.7 billion), according to the Department of Land, Ministry of Interior. Of these credits THB1.37 trillion (US$43.95 billion) were personal housing credits, while the remaining THB490.5 billion (US$15.7 billion) were real estate development credits.
Thailand’s economy expanded by 6.4% in 2012, a sharp improvement from a meagre growth of 0.08% seen in the previous year, but still lower than the 7.8% growth recorded in 2010, according to the International Monetary Fund (IMF). The economy is projected to grow by about 5.9% in 2013.