Thailand Business News –


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Bangkok developers are moving away from Central Business District where rising land prices are hurting the overall costs. A shortage of available land in Bangkok’s central business districts has caused residential developers to move their projects far from the inner city but still close to extended and proposed mass-transit routes, The Nation reported.

See the article here:
Bangkok developers to cope with rising land costs

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.

Third, and perhaps most importantly, the property sector is benefiting from a deep and fundamental change in Thai society. Traditionally, children have stayed in their parents’ home well into adulthood. Even though they may work in urban areas, they often live in suburban neighborhoods and commute to work.

Property market in Thailand remained in a strong position thanks to good sales in the first quarter which were not only driven by the incentives. The stock market is risky to invest in, while buying gold for investment has limitations.
The recovering economy is re-building consumer confidence while homebuyers’ purchasing power is also strong, he said. Development of the mass transit network in Bangkok was another boost for the market. Politics has had little impact on condominium sales but it has dampened investment and the industrial, commercial and tourism sectors.