Labour, Cost woes among challenges facing property sector

"One issue is the shortage of labour, as we know that the Myanmar government is wooing the country's workers back home," Samma Kitsin, director-general of the Real Estate Information Centre (REIC), said yesterday at a seminar.

More developers are expected to turn to prefabricated construction in order to lessen the dependence on labourers, he said.

Meanwhile, the recent minimum-wage hike in Bangkok and nearby provinces has resulted in developers launching projects in other key provinces, he said.

Rising housing demand in other provinces has also persuaded property companies to develop projects in other regional areas, he added, citing Chiang Mai, Khon Kaen, Chon Buri and Phetchaburi in particular.

Moreover, increases in wages and raw-material prices will cause developers to increase home prices by 5 to 10 per cent, Samma said.

There are now 838 low-rise residential projects on the market in greater Bangkok, with a combined 165,000 units. Some 98,800 units, or about 60 per cent, have been sold, said the REIC chief.

Since the massive floods late last year, the market has been improving month on month, he said.

Samma dismissed concern over a high volume of unsold units, saying, "Completed builds that are unsold may not large in number."

He said finished units totalled 94,200, while 35,300 are under construction and 35,500 units are planned.

Unsold units are concentrated in flood-hit areas, namely, Lam Luk Ka, Bang Buathong and Bangyai, and Mueang district in Pathum Thani.

For high rises, there are 358 condominium projects on the market with a combined 139,900 units. Of these, 97,700 have been sold, representing about 70 per cent, he said.

"The figures suggest people prefer high rises rather than detached homes or townhouses," he added.

Ketsara Thanyalukpak, an executive of Sena Development, said that from her survey of visitors to two recent home fairs, most people in flood-hit areas wanted to stay in their homes. Those who want to move out said they would move to nearby districts, as they want to stay close to relatives and friends.

For example, those planning to move in Nong Khaem want to move to Phasi Charoen and Sathorn, while those in Chatuchak want to move to Lat Phrao, Bang Khen and Huai Khwang.

Some residents of Don Muang said they wanted to move to Bang Khen and Lat Phrao, while others in Bang Khae want to move to Phasi Charoen and Bang Khun Thian and some of those residing in Klong Sam Wa want to move to Min Buri, Lat Phrao and Bueng Kum.

At the same time, some flood-hit areas such as Bang Khen, Phasi Charoen, Lak Si and Sai Mai are attractive to home-buyers, she added.

Opas Sripayak, managing director of LPN Development, said his company would move cautiously as the future was uncertain.

The high-rise market in downtown Bangkok had passed its peak in 2009, therefore his firm had shifted its focus to the periphery of the capital, where homes were being sold from Bt700,000 per unit, against the Bt1 million to Bt2 million further in.

Opas said a shortage of skilled labour was one of the main concerns for the property sector.

Prasert Taedullayasatit, director and chief business officer of Pruksa Real Estate, expressed confidence over a continuing post-flood recovery.

However, he said a major risk was that over the past few months, no one was daring to buy new plots due to the still-unsettled issue of the new city plan.