Property market : a crisis, where ? Projects are suspended

First you have to recall what was the boiler room’s motto : there is no crisis, the market is healthy, unlimited growth, ever increasing prices, flowing honey, golden flowers, peace and love (yes love too) etc.

You know the drill now. ๐Ÿ˜‰

A motto perfectly summarized, last october, by a prestigious member of the boiler room :

Thailandโ€™s property market is well insulated from the global financial crisis as it is far less dependent on debt than most property markets, said real estate firm CB Richard Ellis Thailand.

October… Less than 4 months ago.

It’s tasty, isn’t it ? Anyway, time to go on the ground. And what do we see ? Oh my good lord… there are some problems… Amazing. How come ? It’s totally unexpected.

Property developers have suspended work on 12 condominium projects in Bangkok, in some cases because they face financial difficulties in a deteriorating market.

The suspended projects were to provide 209,230 square metres of floor space and were scheduled for construction in 2008 and 2009. (Nation)

You should read the whole article. It gives other data about the stock of unsold units, the number of projects under construction etc. It’s interesting.

But don’t forget the little music : “the thai market is well insulated “…

May peace (and insulation) be upon you. ๐Ÿ˜‰

7 Responses to “Property market : a crisis, where ? Projects are suspended”

  1. 1 olivier 5 February 2009 at 12:08 pm

    “some of them are still waiting for full construction licences and environmental approvals before they can be transferred to customers”

    Sounds like in thailand, we can presell, build and finally ask licences. it’s quite weird i think.

  2. 2 Insanity 5 February 2009 at 12:29 pm

    Forgotten the last crash? Watch the spitting image video on – 80s House Price Slump

  3. 3 Insanity 5 February 2009 at 12:40 pm

    On the subject of Thaland’s property crash being ‘totally unxpected’ the following movie is dedicated to Kirstie Allsop of UK Channel 4’s “Location, Location, Location” who famously said that she would eat her hat if house prices in the UK dropped.

  4. 4 antipadshist 5 February 2009 at 3:54 pm

    for more fun I recommend listening to Radio Thailand (FM 88 as I recall?) ! ๐Ÿ™‚

    with their soothing, practically hypnotising voices with nice relaxing music as Kitaro or some classi music – they try so hard to convince listeners (I guess they hope mostly – investors? or potential investors) that everything goes oh so well in Magic Kingdom, that glorious Democrats’ government leads the nation to unity and prosperity, that charming and everybody’s darling PM Abhisit is the brave captain who navigates the dangerous waters of political turmoils and braves economic storm along – to bring the country to the safe havens.

    it is simply irresistable ! ๐Ÿ˜€

  5. 5 Prokster 7 February 2009 at 9:52 am

    I beleive raimon land paid 500k a wah on Wireless recently (behind the office building..wave place If I remember. And similar money for one more plot in the CBD. These guys are idiots at the best of times, as can be seen by the very poor quality of the pattaya condos.

    Some bkk condos are trying to charge 250-300k / sqm on Chidlom / langsuan / Rajdimri, but older buildings…good ones…like Kalista go for 60-70k sqm.
    Prices in many provinces are way too high still, but it will take a good 12-18 months for bargains to be commonplace.

    The fixation with buying new is a huge problem, and one that will never go away untill proper zoning and tax is put in place….and more importantly the mass transit system.

    20 years ago it took 1 to 1 and half hours from Don Mueng to Silom during rush hours. Same today.

    If Dubai can build a 60km skytrain in 2 years….the answer here is to go the whole hog and build it out to Rangsit, Puthamanothon & Petkasem Soi 100+ ….and to Minburi in the east.

    Fund it through 10,20 and 30yr baht bonds and have an international house with infrastructre experience draw up the terms and forecast toll charges before the local trough dwellers bugger it up in the mind of the public.

    idealist bullshit.

  6. 6 olivier 7 February 2009 at 3:28 pm

    i think condos price will slump because :
    -foreigner investors will desert thailand
    -too many developments on the market
    -middle class will start to fear futur (lose jobs, incomes…)and postpone their investment, homeowner will sell their estate to pay their loan
    -price of materials and lands will decrease so construction will be cheaper
    -since some people will lose their job, their bank will get mortgaged properties and will sell it maybe 50-60% of their value

  7. 7 ray 10 February 2009 at 9:38 am

    i agree with yr ast post but in thailand especially bangkok this process is really slow. my friends have just buit new hotels 21 rooms in sukhumvit( more like inns). he has put average occupancy at 80% per annum and plans to charge 1800 thb per night no breakfast. its not a free standing hotel but 2 shophouses modified into small hotels. and trust me most people have this mentality that prices in sukhumvit area will never drop because they compare it to prices in hongkong and singapore.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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