Continued Property Market Slowdown Likely In 2nd Half Of 2007

[george]

Continued property market slowdown likely in 2nd half of 2007

BANGKOK: -- The property market is likely to continue a slowdown in the second half of this year due to continued uncertainties about Thailand's political and economic direction, according to Kasikorn Research Centre.

The leading thinktank said the combination of political and economic uncertainties, especially the baht volatility affecting exports, had especially undermined consumer confidence in home-buying decisions.

In addition, most consumers might wait for the referendum on the draft charter on August 19 and the general election later this year before making major purchase and investment decisions.

These factors had shaken consumers' and investors' confidence, making them slow their decisions to buy homes for the time being.

KRC projected the number of completely built houses on the market in greater Bangkok would reach 74,500-77,500 units this year, which remains lower than the 85,000-90,000 units estimated earlier.

What should be monitored in the property market now is the marketing strategy of most developers, who shift their focus to the low- and medium-end markets since they believe that the demand, especially for condominium units located downtown or near the mass transit system, remains high.

It said the overall picture of the property sector at present is still sluggish although the slowdown would not be as severe as that in 1997.

However, it had affected small- and medium-size developers, who began to lack financial liquidity and slow their development of new projects.

--TNA 2007-08-01

[Martin]

"...due to continued uncertainties about Thailand's political and economic direction...."

Or it might just be due to the resumption of the realisation that over-housing yourself can result in years of penury for you and your family.

Of course, I am just a grumpy old greatgrandfather whose parents thought long and hard before they "saddled themselves with a load of debt" (which was their view of the act of taking out a mortgage).

But I have faith in the younger generations that they know a bubble when they feel one, and know that, sooner or later, bubbles always end, and in the same way.

Edited August 1, 2007 by Martin

[midas]

"...due to continued uncertainties about Thailand's political and economic direction...."

Or it might just be due to the resumption of the realisation that over-housing yourself can result in years of penury for you and your family.

Of course, I am just a grumpy old greatgrandfather whose parents thought long and hard before they "saddled themselves with a load of debt" (which was their view of the act of taking out a mortgage).

But I have faith in the younger generations that they know a bubble when they feel one, and know that, sooner or later, bubbles always end, and in the same way.

Well Martin if they dont know they soon will ! I think though it is more of

a personal values thing ( i.e. attitude to mortgage debt ). Even Walt Disney

once said in the 1970s " I must be wealthy, I owe $7 million " !!

The difference being in those days at times inflation was higher than interest rates

so you had to be a buffoon not to make money in real estate.

Today as we are seeing right now the financial markets have been

polluted with an incredible array of entangled derivatives.

[bangkoksingapore]

if there is a global recession, naturally the property market shall suffer.

[chiang mai]

I think it's all pretty clear. In a page two article The Nation yesterday reported that there was clearly no real estate bubble in Thailand hence the answer is that there is.

[highdiver]

or maybe those buying are not taking morgages??

that may explain why the "thinktank of the bank is having to put up excuses...

[brahmburgers]

I keep an eye on the property market in northernmost Thailand. I network with farang who are looking to retire up here. It was slow before August 06 when the Thaksin gov't tightened things up with visa restrictions - and then put the squeeze on regulations for foreign ownership of businesses within Thailand. Since then, the markets been slowing. There are also no condominiums north of Chiang Mai, which may have a bearing on the overall picture.

Besides the obvious drawback of disallowing farang to own chanod (land title) in their own name,

the most restrictive factor that keeps farang from purchasing is: being unsure about their visas.

The second reason is being unsure about foreign ownership of Thai based businesses - that in turn might be designated as legal owner of the property.

The reasons quoted in the article, such as exchange rates and such, are lesser considerations - for the people I speak with.

[Mid]

Junta-backed govt is 'pushing foreign property-buyers away': report

The Nation: 1 August 2007

By: Staff Reporters

International property analyst and adviser the Global Property Guide has come out with strong criticism of the current Thai government, accusing it of pushing away foreign property-buyers.

snip