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Market recovery in sight
by Renford Davies -
Thailand Property Report
October 2009
Thai luxury property developer Raimon Land’s latest
research journal, Condominium Focus, suggests that the
Bangkok and Pattaya real estate markets are showing
positive signs of improvement despite the global economic
downturn.
While overall sales have undoubtedly been impacted and the
gap between completed stock and actual transfers has
widened, there has been no decline in property prices or
off-plan take-up rates, the journal says.
Moreover, in the 2Q of this year condominium presales more
than doubled those in the 4Q of 2008, the stock property
index this month has recovered to its peak in August last
year and a 10-15 percent fall in construction prices is
set to fuel an upswing of new launches later this year.
The research further revealed the market’s resilience and
growing maturity. While only 447 luxury condominiums were
launched in Bangkok during the first six months of 2009,
off-plan take up rates were still high at 73 percent and
average per metre prices grew at a stable rate of 4
percent to reach Bt125,910 per sqm.
Raimon Land CEO, Hubert Viriot, said 2009 had been a
challenging year so far for Bangkok property developers,
but there were clear signs that a modest recovery had
begun which is expected to continue as the year progresses
with new launches expected.
“It´s true it has been a tough start to the year, but we
fully expect the market to come back even stronger due to
the shake out of unqualified buyers and the ´wait-and-see´
pent-up demand that has accumulated since last September.”
Condominium Focus also investigated progress in Pattaya
and discovered that an 18 percent fall in passenger
arrivals in the 1Q of 2009 compared to the same period
last year has led to a softening in demand for property in
a market where 50 percent of sales are for holiday units.
The drop in demand has led to lower prices in the resort
city for the first time since 2003 to Bt93,744 per sqm.
“Pattaya is a less resilient market than inner-city
Bangkok due to its dependence on tourism and is
consequentially less immune to ongoing political events
and escalating fears of the H1N1 virus,” said Viriot.
“However, what we can also see is strong growth among Thai
buyers under 40 years of age, who are looking for a
holiday home and robust investment returns. This is very
encouraging and will stand Pattaya in good stead in the
future.” |
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