Supalai sees no condo bubble; Sukhumvit supply a possible exception

A bubble has yet to be detected in Thailand's condominium market as demand overall still exceeds supply, says Tritecha Tangmatitham, manager for business development at Supalai Plc.

"The overall market today is still far from the point we should worry about. Developers today do a lot of research on demand and supply before making investments. They won't do it where there's a lot of supply," he said.

Citing data from Agency for Real Estate Affairs, Mr Tritecha said that in the first half of the year, the condo supply was 18,400 units compared with demand of 19,500.

"There's even a lack of supply in low-rise products," he said.

Last week, the Bank of Thailand's outgoing governor Tarisa Watanagase expressed concern over the potential bubble in the Thai real estate market now that interest rates are on the rise, a recipe for disaster for property speculators.

Mr Tritecha said the crisis in 1997 was caused by the market being dominated by speculators.

"The signs [as in 1997] have yet to be clearly seen today, but it is up to the market to help fix its focus on real demand to avoid the asset bubble," he said.

Speculation currently accounts for about 10-20% of unit sales in the market but only 4-5% for Supalai, he said. Speculation in 1997 exceeded 40%.

However, there are some areas in Bangkok such as Sukhumvit that is in a worrying state of oversupply.