Leading Developers Ready with Fresh Sets of Housing Projects

The leading developers of Thailand are all set to launch fresh Housing projects. All these projects will be of total value approximately Bt 30 billion. This change in Thai property market is the result of improving confidence of the probable purchasers.

The Sansiri Developers, a leading property firm of Thailand is planning to launch around 11 fresh housing projects of entire value of Bt 15 billion. Among these 11 projects, 5 have been already launched.

Another leading property firm, Peurska Real Estate is all set to launch 8 fresh housing projects of entire value of Bt 5.9 billion in March 2009.

The well known property firm, Land & Houses is also going to launch 3 fresh housing projects of value Bt 3 billion in March 2009.

Asian Property Development has planned to launch 11 fresh housing projects of entire market value of Bt 17.7 billion in 2009. Among these 11 projects, it will launch one housing project of value Bt 660 million in March 2009

Even though the financial system of Thailand has dropped a lot by the global economic downturn but the demand of housing projects of value Bt 3 million to Bt 5 million is still very strong.

At the present point of time, nearly every developer wants to improve the sale. Therefore this is the perfect time for the probable purchasers to purchase apartments or residences.

Actually the developers have to try a little harder to meet the requirements of probable purchasers as the demand of residences of value in between Bt 1 million to Bt 3 million is increasing continuously.

Investors are paying attention towards the real estate sector because if they invest their money in any other investment option then they will get return of only 5% or less. However, in case if they invest the same money on a property, it will be an asset for them and they will get a return of approximately 7% - 10%.

CBD Land Prices Declining A Sheer 20-30%

Land prices in Bangkok's central business district (CBD) has by now started to decrease 20-30% due to concentrated demand, Sahatchai Kwancheun, vice president of property firm Harrison, said recently.

He said the most recent deal the company finished prior to New Year's was the sale of a few land on Silom Road for Bt500,000 a square wah, instead of a 28.57% fall from Bt700,000 a square wah at the beginning of 2008.

The Sukhumvit City Resort condominium project in Sukhumvit Soi 11 has also been enforced to lower its cost, from Bt90,000- Bt79,000 a square meter.

Even though demand for undeveloped land and housing projects continues to rise, investors are postponing their purchases, for the reason that most consider land and apartments in the Kingdom, particularly in the CBD, will drop 20-30% once the global crisis begins in reality affecting the local economy, Sahatchai said.

He said investors started waiting to notice what would take place in 2008's final quarter, even though a few plan to start investing in early 2009, particularly those from the Middle East. Singaporean investors have by now started shopping for housing projects.

Prime business localities have seen prices falling 20-30% for undeveloped land and 15-20% for condominium projects.

He said land and apartment prices on Sathorn, Silom and lower Sukhumvit roads were also declining, however just 10-20% for undeveloped land and 10-15% for apartments, because of inadequate supply in those locations.

Harrison will auction off 31 plots of land and building projects of value Bt6 billion this month, together with undeveloped land, hotels and resorts, and serviced and normal apartments, both in Bangkok and upcountry.

“We want to hold this auction to increase our sales and encourage the property market in the first half of 2009, mainly with asset prices now just starting to decrease 10-20 % from 2008,” Sahatchai said.

Investors can discover a number of great deals in the market now compared with 2008, he said, adding that the company anticipated earnings of Bt1-1.5 billion from joint assets of value Bt6 billion in the auction.

Middle-Income Group Will Continue Purchasing

Property firm Supalai is sure of constant growth in demand for houses from middle-income earners, regardless of the global financial crisis.

It is preparing to move ahead with 12 housing projects in 2009, including 4 city condominiums, and its president Prateep Tangmatitham considers definitely that the entire property market will go down by no more than 5-10%.

Do you believe the global financial crisis will influence Thailand's property market?

We think that Thailand will get a minor pessimistic influence from global financial crisis, for the reason that Thailand's property firms are now economically strong.

The property market experienced a tough time in the 1997 economic slump, and most property firms learnt how to handle their business during a crisis. That's why most of them are now in a well-built economic condition. We consider that most of them will float through this twin crisis of global recession and political disorder.

The global financial recession will have a direct pessimistic influence on exports and the tourist division, and that may have an influence on purchasing power for the reason that people's earnings will plunge after the collapse in income from exports and the tourism division.

That may ultimately have an influence on Thailand's property market, when home purchasers postpone their decisions to purchase, or decrease their budget to purchase an apartment from Bt5 million-Bt3 million per unit.

On the other hand, this is a lesser crash for Thailand's property market this time.

Though the financial system will be distressed by the global financial slump, we consider that local demand for housing properties will keep on growing as a few factors are helping home purchasers to save costs. These consist of lower interest rates, a plunge in construction expenses and the government's tax incentives for home purchasers.

Thailand's property market in 2009 may be worse than 2008 due to a crash in purchasing power, although we think this will affect the conjecture market more than actual demand.

Demand for luxury apartments will be poorer as most purchasers in the luxury market are buying a second home. They may postpone their decision to purchase and in its place modernize their existing home.

Phuket Property Flourishing As Fears of Unpleasant Effects of the Tsunami and Political Coup Fall Down

A flourishing tourism industry is helping one part of Thailand resist the descending movement in property prices.

Phuket, Thailand's major island in the Andaman Sea was destroyed by the 2004 tsunami and it was panicked that Thailand's military triumph that overthrowed a democratically elected government in 2006 could have shown the way to an economic misfortune.

There was apprehension that the prosperous tourist industry would break up to a halt, bringing down with it the prosperous foreign-owned housing market. Although the most recent figures illustrate that more than 5 million tourists visited the island in 2007, a raise of 22.5%.

There was a 32% increase in Phuket vacation home transactions throughout the second half of 2007, as per a survey of CB Richard Ellis, Thailand's largest international property firm. All through the same period, the value of these properties increased by 56%.

Charlotte Filleul, a general manager at CB Richard Ellis, said that foreign investors were certainly tense after the triumph and most foreign consumers took a wait and observe outlook.

Once it happens to be clear that the latest government didn't aim to take any measures that would unfavorably influence the tourist industry and the property market, cryptogram of a hold back vanished. "At present the market is strong. We have an ever rising level of enquiries and consumer and we have a very optimistic attitude," she said.

Factors contributing to the hike in prices take in the truth that luxury properties, especially, are still 50% cheaper than the Mediterranean or the Caribbean, management costs are very reasonably priced, service is top class and there is a quickly rising super yacht and marine industry.

This optimistic attitude is backed up by a report from Jones Lang LaSalle which revealed that condo sales are healthy, growing by 25% in 2007 and that interest is rising from ahead of the traditional sources like the US, UK and Scandinavia. Visitors from Russian and Middle Eastern countries are eager to invest.