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SCMP Reporter

THE stockmarket boom is having a flow-on effect through Thailand's property sector, with developers reporting the return of foreign speculators.

  Investors from Hong Kong and Singapore, increasingly cool on China's bloated housing market, are finding bargain units in Bangkok and provincial resorts.

  ''There is a lot more interest than before, because overseas buyers know how the traffic has made condominiums attractive again as an investment,'' said Pradit Chairurttanativech of Pattara Sathorn Company.

 Pattara Sathorn has upmarket condominiums in Bangkok's Sathorn district.

  ''As long as it is the right area, they can't go wrong.''   Real estate agents say falling interest rates and excess stockmarket liquidity from overseas capital have injected new life into the ailing property market.

  Almost every sector is over-supplied: about 100,000 condominium units are expected to be completed this year; but there are no buyers for half the existing projects.

   The glut has kept prices rock-bottom, and many units are available for less than one million baht (HK$312,500).

  However, the deteriorating traffic situation in Bangkok may force more local investors into a market dominated until now by foreign buyers.

  ''A lot of people are looking for condominiums or serviced apartments close to their work because the traffic is so bad now that they can spend half a day just getting to the office,'' Mr Pradit said.

  ''Condominiums are becoming popular again for investment by middle class Thais, so prices may not stay low much longer.''   The agents of one condominium project, Regent Royal Place, reported selling 386 units within a week at a starting price of 2.4 million baht, high by Thai standards.

  Units went so quickly that the project owner, Tanayong Company, did not have time to arrange a launch party. After bookings closed, there were still 400 names on the waiting list.

  Tanayong said its target market was the top end of the Thai pay scale, households with an income of more than 50,000 baht a month.

  Araya Phuphanich, the company's vice-president, said: ''The rush to buy units took us totally by surprise. It is mainly the traffic congestion, which is really starting to affect people's lifestyles.''   Hong Kong buyers are reportedly concentrating their investments on locations close to the main business districts, or along planned routes for the mass transit.

    Regent Royal was advertised for is proximity to a future rail system, which is being developed by Tanayong.

  Bangkok Land, Thailand's biggest real estate firm and the parent company of Tanayong, has said it will deliberately base projects near rail terminals for maximum marketing potential.

  ''It will be a new trend for property developers to site projects near the junctions of mass transit routes in the next decade,'' Anant Kanjanapas, the company's chief executive, said.

  The market is expected to shift towards cheaper units of 70 square metres to 100 sq m, about half the size of more expensive units, to suit commuters.

  Mr Pradit said the condominium market would become more attractive if the government went ahead with plans to make low-interest financing available for buying or renting units near the city centre.

  ''In the future, maybe in a few more years, I believe the government and the developers are going to change the concept to building small condominiums and cheaper ones,'' he said.

  ''But with the land prices so high, it would have to be a high-rise building of 40 or 50 floors, which is new to Bangkok.''   Foreign buyers, who are permitted to own 40 per cent of a condominium project, have shied away from the market for the past year because of the slow return on investments in a static market.

   Thatree Boonicharern, Siam Fortune's chief executive, said it was unlikely prices would rise sharply now, but the market potential was better than for some time.

  ''Speculators were hurt by the market slump before and are being more cautious now. But careful buyers are certain of a good return on inner-city condominiums, which will be in strong demand,'' he said.

  The stockmarket surge is expected to have a favourable effect right through the residential market, prompting some analysts to predict a total real estate recovery within six months. Earlier forecasts ranged from two to three years.

 Developer Punee Bhudhari said: ''I think we are talking about [recovery] well before the second half of next year. The stock market boom shows increasing confidence by investors in the Thai market and this is also important to the property market.

  ''But developers should resist too much speculation by short-term investors, which will only have negative results.'' 



Speculators drawn by Thai boom