South East Asia Property Market Expected To Withstand the Global Recession

Certain Asian markets are flexible enough to withstand global recession. Asia is well placed to withstand the global finance and property recession.

South East Asia's property markets are not protected however they are more probable to be pliant to the US sub-prime catastrophe and knock-on financial meltdown.

“No one can descend scot free from what's taking place, as global liquidity has been concentrated and also the feel-good issue has gone,” said David Simister, chairman of real estate company CB Richard Ellis Thailand.

“It will definitely create a hold back and a market where for the coming18 months it's a terrible time to be selling something although I don't expect a condition where there will be a big slide in costs,” he added.

Analysts consider that the 1997 Asian crisis forced regional banks to reduce their loan practices to the real estate sector and, with the exemption of Vietnam; nearly all Southeast Asian countries have not faced the similar real estate booms observed in Asia's increasing giants China and India.

These two factors represent Southeast Asian banks, which were stumbling with non-performing loans to the property sector following 1997, are in comparatively good shape.

“I believe Southeast Asian banks are still less exposed to real estate than Northeast Asian banks, said Peter Tebutt, senior director of financial institutions at Fitch Ratings in Hong Kong.

In places such as Phuket property is continuing to sell in good health, particularly at the high end of the market. Overseas property investors are still demonstrating a lot of curiosity. There's lots of Middle Eastern money that needs to extend into new rising markets.

“The division of the market that is reliant on mortgaging the family house and using the difference to purchase a property in a resort is going to be influenced,” said Simon Landy, managing director of Primo Company, a real estate agent in Thailand.