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18/09/2010 - Bangkok property booming....  18/09/2010 - Bangkok property booming....

New condominiums in Bangkok are being launched almost daily, with developers and investors unconcerned about the possibility of a property bubble.

In fact, the number of new condominiums has tripled from 3,389 in the second quarter of 2009 to 13,028 in the first quarter of 2010.

Asian countries concerned about asset bubbles and housing affordability have introduced measures to try and cool their respective markets.  However, Thailand is unlikely to do the same.

“Interest rates are still low. There's still huge demand, particularly with units from listed companies. Growth in the property market tends to move in tandem with GDP and the economic fundamentals are more sound now,” said Sorapong Jakteerungkul, property analyst at Kasikorn Securities.

The gains in the Thai property market have been met with caution as the events of the 1997 Asian crisis caused an economic downturn in Malaysia, South Korea, Indonesia and the Philippines.  Credit ceased even to respected developers as Asian banks struggled for years to shed bad loans.

This year construction is once again at the 1997 high, but Thailand’s economy is healthier now than in 1997, with large foreign exchange reserves, a robust financial market, low corporate debt and record low interest rates.

The International Monetary Fund has predicted growth for Thailand at eight percent - the highest in fifteen years in South East Asia.

Lertchai Kochareonrattanakul, a Fitch Ratings analyst who specialise in real estate, sees more room for growth because of the high demand:

“The speculation we see is different from in the past. It's less than before and it's Thais with a lot of liquidity, buying and looking for asset prices to appreciate,” he said.

Two projects launched in March by LPN Development sold out within the first day with total sales of 4.7 billion Baht.

The Bank of Thailand remains watchful over the possible signs of a property bubble.  However, as long as real demand meets supply, Thailand property looks set for further growth in the future.

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