Tough outlook ahead from new rules, labour issues

Referring to a discussion with chairman of the Thai Real Estate Association, the house said that the central bank is more concerned with possible bubbles in the property market. It is prepared to launch new preventive measures like the more stringent loan to value rule. As another hurdle for condominium development, the requirement for the environmental impact assessment (EIA) would also delay their projects as the process could take 6-12 months. 

The property sector also anticipates labour shortage. The hike in the minimum wage nationwide will encourage some workers to flee the capital city to provinces. Meanwhile, registered foreign workers are also allowed to work in the prescribed areas. 

Tisco Securities expected this to result to lower pre-sales, particularly for condominium projects. They could raise prices to keep the gross profit margin.

"BOT's more stringent rules would benefit existing developers, as newcomers would find it harder to enter the market. However, labour shortage and higher minimum wage would lead to a decrease in new projects and impact on their gross profit margin," it said.