LH chief says slowdown is inevitable

Land & Houses

Land & Houses

Thailand’s property market is about to slow down, despite a downward trend in construction costs, oil prices and interest rates, as buyer confidence is ebbing, says Anant Asavabhokhin, the chief of Land & Houses Plc, the country’s biggest residential developer. He said the global financial crisis had raised anxiety among lenders, even healthy ones, and mortgage rejection rates would climb as a result.

The credit squeeze will also reduce demand by foreign buyers. Investments by overseas funds would disappear as investors lack liquidity, he said.

As well, he said, some developers would find it hard to expand business by tapping property funds, warrant issues or project finance, so only large developers would remain in the market.

”No one has said they would expand investment in 2009,” Mr Anant said. As a result, supply of new developments will be reduced, as will be the number of active developers.

Mr Anant said the country’s economy needed to be stimulated through more government investment, while the private sector should continue investing if possible. Most importantly, he said, the Bank of Thailand should not be worried about inflation and should reduce interest rates in order to stimulate investment.

”Everyone says the country’s economic fundamentals are good but we should look ahead. What are we waiting for? What will happen next?”

Mr Anant said the country had endured almost four years of political uncertainty and tension that had hurt the economy. ”We have paid too much attention to politics and every sector seemingly has become worse.”

He foresees no particular standout segments in the property market next year. The condominium market has boomed in recent years as high oil costs prompted consumers to seek homes closer to their workplaces in the city, but with oil prices falling fast, condo sales could cool.

However, Mr Anant believes that luxury property priced at 20 million baht or more would not be affected as affluent buyers had cash and savings.

He said housing prices in the next six months would be stable as construction costs and higher oil prices were in a downward trend.

”Whether prices will decrease or not depends on the market competition,” he said at the opening of the HomePro Expo at Impact Muang Thong Thani.

About the author

Kanana Katharangsiporn Kanana Katharangsiporn
Kanana Katharangsiporn is a senior journalist with The Bangkok Post, Thailand's first English language newspaper and specialises in property and real estate areas.
Other posts by Kanana Katharangsiporn ( 42 )
Website: http://www.bangkokpost.com/

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