Investors interest heightens

Investors interest heightens
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A considerable amount of property buyers and investors have returned back to the Thai market this month and more transactions are expected in the second half of the year, according to Aliwassa Pathnadabutr, Managing Director of the property consulting firm CB Richard Ellis.

"This will be true if the government can keep the situation without violence until the election day" she said.

"Foreigners who do not follow Thailand´s situation keep asking about the new election."

The overall outlook for the Thai property market has improved considerably, after the Constitution Tribunal’s decision to dissolve the Thai Rak Thai party in May. This was seen as a promising move to clear up the political instability plaguing Thailand.

A lack of confidence was still seen by many in Thailand, until graft investigators seized the assets of ousted Prime Minister Thaksin Shinawatra and authorities announced new elections as early as November would take place.

"Demand remained strong but decisions were delayed, so as soon as everything seemed to be clear, property buyers hurried to make decisions" Ms Aliwassa said.

"The most active market was the high-end residential sector. This segment is the company´s residential focus. Demand was pent up and had slowed down since last year.

Early-bird buyers now hurried to acquire units they had aimed at as they were afraid other buyers would grab this chance to get a good price."

The property developments that attracted most attention were those that were nearly completed. With high-end residential developments- Athenee Residence and The Infinity set for completion next year, the future looks bright.

Currently, resale prices have risen 25-35% compared to prices that were seen in the launch period. Now prices are quoted at more than BT100,000 per sqm, because very few re-sale units are being offered on the market.

Ms Aliwassa added that the number of foreign buyers of high-end residential property had doubled during the 10 years since the economic crisis in 1997. At the end of June, 42% of buyers making transactions via CBRE were foreigners- this was an increase by 20% 10 years ago.

Of the 4,000 high-end residential units the company sold during the past few years, foreigners acquired 1,680 units, worth over Bt20 billion. Unit sizes ranged one to three bedrooms with prices from seven to 25 million baht a unit.

Foreign buyers of Bangkok luxury residential units were based in Hong Kong, Singapore and the United States, while they came from Britain, America, Singapore and Australia.

"Koreans have emerged as big-lot buyers and property developers after the Korean government allowed their people to invest overseas since mid-2006" she said.

Their interest was in condominiums, hotels and golf courses, she said. CBRE is planning to open a new business unit to take care of Korean buyers.

Earlier this year CBRE opened a new business unit to meet the needs of Japanese customers after its branch in Japan subsequently submitted many inquiries. Japanese demand for both residential units and office space is substantial, so the company says it needs staff members who speak Japanese and understand its culture.

The company is also doing a market survey in Phuket looking at buyers from Europe, Korea, India, Dubai, Russia and Scandinavia. In September, it plans to open new branches in Samui and Pattaya.