The Provision of Low-cost Housing by Private Developers in Bangkok, 1987-89: The Result of an Efficient Market?

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Abstract
A sample survey was undertaken of two groups of formal housing developers in Bangkok, one which did not undertake low-cost housing development in the 1987-89 period and one which did. The first group, which represented a 90 per cent majority of developers in Bangkok, was not able to supply low-cost housing primarily because profits were affected mainly by market impediments in the form of high prices for land and building materials. The minority group could 'profitably' supply low-cost housing because the main market impediments were absent, especially that of land. However, banked land was largely used, probably resulting in suboptimal profits although they were not perceived to be so. The overall findings indicate that private sector supply of low-cost housing in Bangkok resulted mainly from the effect of both a competitive product market and the exceptional, suboptimal use of banked land for low-cost housing by a small minority of developers.

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