Thai Property News

An article in Hua Hin Today reveals a report by The Real Estate Information Center of Government Housing Bank confirming the property slowdown given the nationwide land & real estate fee payments decreased by both value and number for the first half of 2007 across all regions.  Meanwhile, an interview with the Deputy General of the Fiscal Policy Office, points to an increase in property fees in the third quarter, together with other indicators suggesting recovery is on its way.

Mr. Samma Kitasin, The Real estate Information Center director, reported that the nationwide land & real estate fee was paid 418,323 times in the first half of year 2007, decreasing 4% compared to the same period in the year 2006 (437,417 times). 2007’s payment totaled some 5,087 MB, a decrease of 6% compared to the 5,415 MB fee at the same period in 2006.

Land and real estate purchasing peaked in 2005: in that year the fee was paid 907,428 times, totaling 11,759 MB.

Bangkok and its surroundings were down 7% and central and northeastern regions were down 5%. Somewhat surprisingly the southern regions increased by 6%. Surat Thani Province had the highest increase at 50% in the first half of 2007, due primarily to the real estate development on the Island of Kho Samui.

Wichit Chaitron for The Nation however, reports that the economy has begun to show signs of recovery as the private investment and consumption start to pick up in the third quarter of this year. In an interview with Pannee Sathavarodom, Fiscal Policy Office’s Director General, he reported that the tax collected from property transactions expanded by 5.2 per cent in the third quarter after the negative growth in the past four quarters. The trend shows that the investment is set to expand to next year.

Other indicators cited by the Fiscal Policy Office’s Director General, for the economic recovery include:

• the rise of value added tax collection in the third quarter by 3.1 per cent year-on-year. VAT collection rose by 0.7 per cent in the second quarter compared to the same period last year

• the sale of cars and commercial vehicles rose year-on-year, following negative growth since the fourth quarter of last year
• Private investment increased in the third quarter of 2007 as imports of capital goods expanded by 4.9 per cent year-on-year, compared to the second quarter when the private investment rose by 3.9 per cent in terms of value. Prior to that private investment had dropped year-on-year.

The Director General concluded that the economic recovery process had already started in the city but the recovery process has yet to reach ‘up-country’.

At Thai Property News, there is no doubt in our minds that the property sector is softening: there are now examples of discounts being publicly offered by developers, and yet, there are equally bullish signs from others.  The property developer Petchboonma Co is examining developing more condominiums in the Sathon area after a successful launch on Ratchadaphisek Road resulted in 80% sales in the first two months, says marketing director Pattira Chaiyapatranun.  Likewise, the hotel operator Veranda Resort and Spa is expanding to the north of Thailand with an investment of 450 million baht to develop new resort and residential properties in Chiang Mai next year. The new resort, built at a cost of 350 million baht and located on a 30-rai hillside in Hang Dong district, has 69 rooms and two restaurants.

However, all this hangs in the balance and we must wait until the results of the election in December to  get a real steer on the way the property market in Thailand will go.  But if the indicators are right, and given the weakened Baht, now might be the time to push for some bargains in the Thai property market.