Foreign investor interest in Thai property weakening

Foreign investor interest in Thai property weakening

KANANA KATHARANGSIPORN
The global financial crisis is affecting the Thai property market as a Singaporean investor just withdrew an investment in a project on Sukhumvit Road, said Patima Jeerapaet, managing director of the property consultant Colliers International Thailand. He said land and condominium prices in the central business district (CBD) and Sukhumvit Road's early sois will decline due to limp foreign demand.

According to a Colliers database, over 60% of foreign buyers acquiring a condominium unit priced at 180,000 baht a square metre were from the financial sector. Many were investment bankers or investors gaining profits from the finance business or the stock market and shifting into the property sector.

"Foreign buyers facing a financial crisis need to sell property as quickly as possible. Some of them may sell at cost or with a lower than expected margin. This will cause falling prices though new buyers are waiting. The prices will not be as much as speculated."
He said reasonable prices for grade-A condominium units in the CBD and Sukhumvit Road near the BTS skytrain should be between 90,000 and 120,000 baht a sq m and 65,000 to 80,000 baht for grade B+.

Anant Asavabhokhin, president and chief executive officer of the country's largest developer Land & Houses Plc, said land prices in the Sukhumvit area soared to 500,000 baht a square wah from 300,000 baht in only three years.

He confirmed that land prices in the inner city would definitely drop as soaring prices in the past were driven by foreign investors, mostly from Hong Kong and Singapore. At the same time, condominium units on Sukhumvit Road near the BTS skytrain, prices of which were now quoted at 130,000 to 140,000 baht per square metre, would experience sluggish sales, he added.

"Next year, buyers will wait for construction to stall to take their money back while developers will wait for buyers' hesitancy in paying in order to confiscate their downpayments. But eventually, the developer will go broke first."