REIC warns of slowdown

Real Estate Investment Centre

Thailand’s Real Estate Investment Centre (REIC) has released a report advising developers to downsize residential projects in anticipation of a drop in demand in 2009.

REIC director-general Samma Kitsin expects Thailand’s property market will soon start to feel the effects of the widening financial turmoil and slowing global economy. According to Samma, a decline in exports will take effect this year and continue into 2009, weighing on Thailand’s economy which will in turn have a negative impact on demand for property.

“The US financial crisis will affect the Thai economy and property market next year. We must warn developers before their business plan for next year is complete”, said Samma.

Although demand may hold up for residential projects priced between Bt2 million and Bt5 million, Samma expects the luxury end of the market to suffer as foreign buyers suspend investments overseas.

Housing Business Association vice president Issara Boonyang shares the view that the Thai property market will be adversely affected by the current financial crisis, as buyer confidence declines and economic growth slows.

“The impact will show next year when people are faced with high inflation and slowed economic growth. Many home buyers will delay their decision to buy. If they do buy, they are expected to revise their budget and buy residential units with offer prices between Bt2 million and Bt3 million. Projects with high offer prices will face the negative impact of this crisis”, said Issara.

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