Home-price dips seen as short-term
House prices will be temporarily depressed while insurance costs will rise because of the flood crisis, asset-valuation specialists said yesterday.
“The economic situation is the most important factor affecting house prices, while natural disasters usually have a short-term effect,” Sopon Pornchokchai, president of the Thai Appraisal Foundation, said yesterday at an international conference on valuing infrastructure and utility properties.
After the tsunami hit Phuket in 2004, land prices remained almost unchanged for a few years, but property prices in the well-known resort province have tripled since then, he said.
Land prices in Aceh province in Indonesia, which also was severely damaged by the tsunami, have now risen because of improving infrastructure.
Land prices in Bangkok last year increased 4.4 per cent on average. The prices of flood-hit areas will remain on the rise but at a slower pace, he said.
Restoring existing infrastructure and building new infrastructure such as expressways will shore up the price of real estate, he said.
House prices in flooded areas will not be affected much, as government investment in flood-prevention measures will prevent a recurrence of the disaster.
Meanwhile in Japan, the economic bubble of the 1990s drove down house prices there in the subsequent period, but there are signs they are about to pick up again.
House prices in the United Sates have suffered from the financial crisis of 2008 and are unlikely to recover soon, Sopon said.
John Cirincione, business development director at JVI Solutions, a Florida-based firm consulting on appraisals and inspections, said natural disasters usually pushed up insurance bills, as insurers demand higher premiums or refuse to provide coverage.
Median home prices in the US have returned to their 2002-03 level while Florida has returned to the 2001 level, which are still much lower than their peaks in 2005-06 before the financial crisis hit in 2007-08, according to an analysis by JVI Solutions.
House prices and sales volumes in Florida are stagnant and are predicted to stay that way through most of the decade.
Home prices took 19 years to rebound after the Great Depression of the 1930s, Cirincione noted.
