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Baht/$ 33.57/62
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GOLD |
14,000
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PROPERTY & BUILDING
KANANA KATHARANGSIPORN
Rising construction costs have caused a slowdown in self-built housing demand for units priced at 3-5 million baht a unit, says Panthep Thanchitikul, president of the Home Builder Association.
The spike in construction costs and inflation has reduced purchasing power in the middle to low-end segment and has cut demand for 3-5 million baht units.
However, wealthier buyers of units priced at seven million baht or more have rushed to build their units out of fear that prices would rise.
''If they delay their decision or if construction is delayed, cost could rise by 3-4% a unit.'' he said, adding that prices increased by 7% in the first half of the year.
Mr Panthep said that during the first quarter of this year, the home building market had improved following the election of the new government. But rising oil prices in the past two months have hit consumer confidence.
In May and June, some home builders had turned down contracts because of high construction costs. Others refused to give price quotes until steel prices stabilised. Steel prices have more than doubled since last year.
Mr Panthep suggested that home builders reduce construction and management costs and diversify their construction materials to insulate themselves against volatile prices. He also urged builders to use prefabrication for small units because they take less time to build.
The association will hold the Home Builder Fair from Aug 20-24 and hopes to sell 1.5 billion baht worth of properties from the fair, the same amount as last year.
He said the home building market was estimated to have the same value as last year at 8.5 billion baht.
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