Buyers are savvier, scarred indelibly by the 1997 crash. Expensive oil has trimmed growth forecasts for Thailand's healthy economy. Stocks are wading through a swamp, sapping confidence.

Meanwhile, construction costs are up as developers crowd in.

'I think you will see more challenges on the demand and supply side, there's a more cautious tone,' said Jim Chang, senior executive vice-president at City Realty.

Those challenges coupled with a condominium supply surge could force marginal developers out of the market.

Golden Land chief executive Liakat Dhanji said: 'If consumer confidence starts to decline, with so many new players in the market there will be a squeeze in the short term. However, the long-term indicators remain intact.'

Projects yet to break ground that are still chasing buyers, especially condominiums, may remain a mirage of glossy brochures.

Meanwhile, buyers must bring deposits and pre-approved mortgages that banks now demand almost as a matter of course before financing projects.

Mr Chang said: 'Right now, if you are still planning, people may not want to build for you, especially if it's a fixed-price materials contract, it loses its sexiness.'

About 11,000 new condominium units are forecast to be built within two to three years, against 36,000 on the market, of which about 3,000 are grade A. Fears are growing that a bubble in this luxury sector could burst soon.

Consequently, prices - now above pre-crash highs - have peaked for this year.

Top-end condominiums along prime Sukhumvit, Silom and Sathorn roads are unlikely to go much beyond 90,000 baht (HK$17,172) to 100,000 baht a square metre seen now. The average price is about 75,000 baht per square metre.

Meanwhile, single-detached housing is in better shape, with 50,000 properties being completed annually, 90,000 below pre-crash levels and comfortably within the 80,000 a year real demand envelope.

Houses are more affordable due to easier mortgages, despite prices averaging 12 million to 15 million baht, up from six million to eight million baht pre-1997.

By 2002, mortgage terms lengthened to 20 years or more from 10 years before the crisis, interest rates fell as low as 4 per cent, against 12 to 17 per cent in 1996, and land prices were down 40 per cent. Banks now only require deposits of 20 per cent for properties worth up to 10 million baht.

Easier mortgages are not the only change making house buying more affordable and safer. Many developers now escrow deposits. That may become mandatory.

Pre-approved mortgages have become common over the past few years, encouraging people to buy and giving developers confidence.

Mr Dhanji, who insists on pre-approved mortgages, said: 'Not every developer follows this as banks will only extend this arrangement to creditworthy developers.'

Together, these measures eliminate much risk, a fundamental shift that makes a repeat of the residential market meltdown of 1997 unlikely. More change is to come. By the end of the decade mortgage-backed securities may appear along with sophisticated mortgages. Generally they are simple repayment plans.

They also underpin the market, supporting demand when the economy softens or interest rates rise, giving developers hope.

Hemaraj Land president David Nardone said: 'The affordability index is good, even if global interest rates climb.'

Developers are confident in the long term because most Thais aspire to own a home.