Over the past several years, concerns have been periodically raised about the possible re-emergence of a bubble in the Thai housing market, particularly on the back of condominium oversupply in Bangkok and a continued surge in land prices.
The latest warning by Supachai Panitchpakdi, a former director-general of the World Trade Organization and secretary-general of the UN Conference on Trade and Development, about a possible property bubble, as most domestic private investment has been concentrated in the property sector, has further driven home those prospects.
But is Thailand heading for a 1997-style property crash?
The answer remains debatable among property gurus, economists, the Bank of Thailand and the man on the street.
Bank of Thailand governor Veerathai Santiprabhob says there are not yet traces of dramatic growth in borrowing for property speculation activities, while banks have been better at managing risks associated with project financing.
Mr Veerathai says the increase in investment in high-end property was partly attributed to low interest rates, which pushed investors to look for higher returns.
"The spike in real estate prices we are observing is not alarming and will not create systematic risks like what happened during the 1997 crisis, where speculators' funding was mainly concentrated in borrowing," he says.
And we've been here before, in 2013 to be exact. That's when Forbes flatly predicted "Thailand's bubble economy is heading for a 1997-style crash" and when Zerohedge claimed that "Thailand's massive real estate bubble" was the biggest disaster in SE Asia waiting to happen and Oxford Business Group was "monitoring for signs of a real estate bubble".
But even though property prices have risen quickly in some segments, the main condition that is different between today and the 1997 financial crisis is the source of funding.
Most of the property speculation in 1997 relied on loans, but now the majority of the money used to buy property is the savings of wealthy people, while the hikes in property prices are mostly concentrated in the luxury residential segment.
On the supply side, financial institutions have been better at risk management in recent years, especially loans for real estate development for both pre- and post-financing.
For pre-financing, a lot of developers have shifted to relying more on capital markets, which have lower financial costs.
Some developers may use financial instruments in the capital market such as bills of exchange to fund their long-term investments, a practice described as a mismatch. The central bank does not believe these isolated cases will affect the financial system as a whole.
Jaturong Jantarangs, assistant governor of the monetary policy group at the Bank of Thailand and the Monetary Policy Committee's secretary, says a bubble in the property sector is less likely to happen, as developers can adjust themselves steadily to market conditions.
"[The Bank of Thailand] has observed that property developers have been adjusting themselves quite fast when they see that demand is low," Mr Jaturong says. "They can put a project on hold and pay back the customers who've reserved the units."
He says that this year fewer new projects will be launched than in 2016, as developers are decreasing supply to match lower demand.
The decrease in housing loans is also one of the factors that has made developers taper their investment, Mr Jaturong says.
"We have been constantly saying that there's no bubble in the property sector; rather, there's only been a price rise in some segments," he says.
Mr Jaturong says property in areas along skytrain routes saw their prices rise the fastest -- including condominiums, which have experienced a recent cooling because of the drop in demand.
Developers hold a similar view. Unlike the pre-1997 era, the current Thai property market is seeing no traces of a possible bubble.
The industry structure has completely changed, while the environment is different, with developers and banks being more cautious and having warning systems.
Prasert Taedullayasatit, president of the Thai Condominium Association, says developers have been more cautious in launching new supply after they learned a significant lesson from the 1997 financial crisis.
"During the property boom from 1993 to 1996, [developers] used leverage to fund their investments, with a debt-to-equity ratio of up to 7-8 times amid interest rates of over 12% a year," he says.
"Today developers have more financial discipline. They try to borrow as low as possible. Their debt-to-equity ratio is currently no higher than two times despite the very low interest rate environment."
Many developers, particularly large ones that dominate the market, also have their own research departments to monitor the market situation, as well as supply, demand and inventory, before launching new projects.
There is also an additional warning system offered by the Real Estate Information Center (REIC), a part of GH Bank, which supplies quarterly market research and significant information like new supply, demand, sales and an index of developers' sentiment and residential prices.
Financial institutions are also more cautious in project financing and using credit scoring when considering mortgage loans.
"The property industry's structure is stronger," says Mr Prasert, also president of premium business at property developer Pruksa Real Estate Plc. "We have an industry warning system from the REIC, a control system from the National Credit Bureau."
He says an investment in the property sector might look large in terms of value, as property prices have risen every year in line with soaring land costs. The higher total value in new supply launched this year was derived from a market shift to the high-end segment.
"High household debt, which had an impact on homebuyers in the middle- to lower-end segment, has driven developers to launch new supply in higher-priced segments," Mr Prasert says. "Everyone learned a lesson and has had more experience."
Chainid Adhayanasakul, chief executive of SET-listed developer Property Perfect Plc, says more individual investors have also jumped into the property sector as interest rates have remained low.
"There may be a little bubble in the property sector, for which we should likely be more cautious," he says. "But with stricter mortgage rules, the chances of a property bubble should be thin."
Driven by higher land prices, the value of property projects today is much higher than in the past. Many new projects announced this year are mixed-use developments with high price tags.
They include TCC Group's One Bangkok with a total investment of 120 billion baht over the next seven years and a joint venture development between Dusit Thani Plc and CPN Plc with a budget of 36 billion.
Mr Chainid says new residential supply launched in Greater Bangkok over the past four years was around 100,000 units on average a year, much lower than during the pre-1997 era, when it totalled more than 200,000 units a year.
"There were many empty houses in the market during the post-1997 era," he says. "Property buyers today are no longer speculators. They are either real homebuyers or investment buyers who are willing to get a unit transfer and rent it out if they cannot resell an off-plan unit."
He says the mass transit lines that did not exist in 1997 have created new residential demand near the stations.
"Condos near mass transit lines are not only the first homes for many people whose lifestyle changes have seen them living alone or having smaller families, but also second homes for those living in the suburbs or those buying property as investments."
Issara Boonyoung, managing director of property developer Kanda Group, says the property sector today is unlikely to result in a bubble because supply is nothing like it was pre-1997.
During that period, supply totalled 140,000-170,000 units a year while demand was just 70,000-80,000 units. Prices also rose heavily as speculation emerged in every property category.
"In those days, some properties were bought in the morning and sold that very afternoon," Mr Issara recalls. "Some passed through three sets of hands in a single day. It was generally a speculative sentiment."
He says there is speculation today in some segments, like condos and property in prime locations. But these speculators are able to secure unit transfers, sometimes using cash, due to low interest rates.
Newly launched housing supply in Greater Bangkok for 2013-16 was 85,000, 72,000, 60,000 and 50,000 units in the respective years, showing that developers are reacting as needed.
"Nonetheless, we should heed the warning from Mr Supachai, as property demand slows in line with the economy," Mr Issara says.