Thailand Business News – Chinese and Indian investors showing early signs of interest for Phuket. According to market research released yesterday by consulting firm C9 Hotelworks, resales highlighted the sector, bolstered by Asian wealth, which is leading the global trend. Thailand Business News
The SET index bottomed at 432 in December 2008 after tumbling from a high of 833 earlier that year. The index then levelled off in Q1/09, before working its way back to 560 in May. Triggered by positive pre-sale signs from developers, a reduction in construction costs and the government’s stimulus package, property stocks were among the first to bounce back. The SET’s revival reached a mark just 32% below its peak, in line with other world stock markets including the Dow Jones (-33%), Singapore Straits Times (-27%), the Hang Seng (-25%) and the FTSE (-27%).
The Bank of Thailand Monetary Policy Committee stopped cutting its key rate in May 2009 after seeing signals of a recovering economy. Many expect banks to adjust their rates down once rising confidence supports housing purchases, and promotion campaign launches to grasp home buyers.
As a result of declining consumer confidence during four consecutive quarters there has been a dramatic drop in sales of big ticket items such as vehicles (-33%). Bangkok housing registrations for single houses and townhouse units have also been hit hard, while investments and new mass transit lines have boosted market share for condominiums in the residential property sector, although the market demand as a whole has been lower. Transactions will most likely remain slow until confidence returns to both buyers and bankers, who finance property developers and their customers.
Instead of wasting resources when consumers were clearly holding back, we decided to restructure the company, clean up the balance sheet and refinance our debt with local banks.
Developers with solid projects have access to financing while buyers have access to credit.
Developers are confident in the property market’s long-term potential, which will improve in line with Thailand’s economic growth, despite political turmoil on the streets of Bangkok.
Property firms in Thailand saw their performances improve in the first quarter compared to the same period last year, largely thanks to tax breaks for home-buyer. The property market has improved since the third quarter last year with sales picking up. Based on a wide range of forecasts, the Thai economy is expected to grow by 4% this year, but political uncertainty will reduce purchasing power and local and foreign investment in Thailand.