The Bank of Thailand and developers are divided over whether a property bubble is looming.
Songtham Pinto, director of the central bank's macroeconomy division, said the bank is wary of a property crisis that could result in huge losses with a slow recovery.
But developers claim the country's housing trend has changed and the market is now mostly controlled by large firms capable of responding quickly to any risks.
"We need to be cautious and monitor the [property market] situation very closely and prepare measures to cope with any possible problem," Mr Songtham said at a property seminar held yesterday by the Real Estate Information Center (REIC).
However, Atip Bijanonda, the new president of the Housing Business Association, warned that wrong measures may fail to forestall the problem and harm real buyers.
"A lower loan-to-value ratio will not prevent short-term speculators, as they can still sell their booked units at the same or lower prices than they paid, but this measure harms real buyers who really want the units," he said.
Prasert Taedullayasatit, chief business officer of the SET-listed Pruksa Real Estate Plc, said there is definitely no property bubble.
He said overall market value last year totalled 626 billion baht, with Greater Bangkok accounting for 312 billion.
About 86% of projects were in the hands of the top 10 developers, who always do market research, follow housing demand and respond quickly to risks.
"The property market is hot because of market mobilisation and new real demand, particularly in the middle-to-low-income segment where there are many first-time homebuyers," said Mr Prasert.
Condominium demand last year spanned a wider area of Greater Bangkok along mass transit lines.
"No bubble yet appears in the condo sector, but there is an oversupply in some locations," Mr Prasert said.
Mr Atip said a bubble and oversupply never happen at the same time. Bubbles are caused by a lack of supply that leads to a rise in property prices, while an oversupply will make prices stagnant, drop or rise slightly.
"An increase in prices is driven by the development cost structure, which is always revised up. In some cases, it is driven by developers buying land to develop a project regardless of how high land prices are," he said.
Issara Boonyoung, a former president of the Housing Business Association, said the low-rise segment faces a lack of supply.
Provincial investment is risky, so developers need to study market demand and size before making a decision, he added.
REIC data showed 324 condo projects comprising 142,052 units worth 468 billion baht were being marketed as of the end of last year.
In the first four months year, 29,713 units from 65 projects were launched.
In the low-rise segment, 733 projects with 158,429 units worth 577 billion baht had been introduced in Greater Bangkok as of the end of 2012, while 13,371 units from 68 projects were launched in this year's first four months.