Property buyers and investors are on tender hooks amidst global fears and speculation, according to forecasts from Knight Frank.
Slowing growth in China and Europe’s ongoing financial crisis “has many buyers and investors of real estate on edge about the future,” speculated Mr Ulf Schaefer, director of Residential Department – Premier Home, Knight Frank Chartered (Thailand) Co., Ltd.
Bangkok’s property is susceptible to both internal and external forces. Internal factors consist of: possible inflation threats; unstable ground of Thai politics which is struggling to find a common ground upon many policies; as well as the challenges Thailand is facing in its recovery from last year’s devastating floods.
Externally, Europe’s escalating problems are adding pressures upon the rest of the world, as well as a slow recovering US economy. A slowing Chinese economy also sparks concern and anxiety upon the level of impact to Bangkok.
Slowing growth in China and Europe’s ongoing financial crisis “has many buyers and investors of real estate on edge about the future,” speculated Mr Ulf Schaefer, director of Residential Department – Premier Home, Knight Frank Chartered (Thailand) Co., Ltd.
Bangkok’s property is susceptible to both internal and external forces. Internal factors consist of: possible inflation threats; unstable ground of Thai politics which is struggling to find a common ground upon many policies; as well as the challenges Thailand is facing in its recovery from last year’s devastating floods.
Externally, Europe’s escalating problems are adding pressures upon the rest of the world, as well as a slow recovering US economy. A slowing Chinese economy also sparks concern and anxiety upon the level of impact to Bangkok.
Rising debt levels in Japan are also adding to growing concerns of Knight Frank, the leading independent global property consultancy.
Turmoil in the Middle East is only fuelling the fire of fear.
“Inventory of new residential property peaked in 2010 with approximately 70,000 new units.
“Due to the flooding and recent world events, developer sentiment for the future has turned cautious, resulting in decreasing supply for all market segments,” analysed Mr Schaefer.
Bangkok’s CBD area is limited due to the scarce availability of available land. The CBD area returns high values of property, average prices exceeding THB 100,000 US$ 3,176per sqm. Some properties in this exclusive area exceed THB 300,000 US$ 9,527.
Staggering prices and a land limitation issue have seen a surge in sales in the fringes of the city and its suburban areas as Thai buyers and expats seek more affordable units.
The fringes of the city and suburban areas offer a good supply of land and healthy competition within the areas market: keeping prices in check and making housing the most affordable in the Bangkok area. The Ratchada and the Rama IX area have seen strong demand. City fringe prices fluctuate between 70,000 (US$ 2,218) and 100,000 (US$ 3,167per sqm).
Across the board, however, property prices have been rising in Thailand’s capital.
The external affecting factors will keep over all sentiment of developers on the cautious side, according to Mr Schaefer. He expects the caution to be exercised until further clarification upon the global circumstances.
Foreign buyers from traditional European markets will be limited in their numbers. To some degree, new markets in Asia will compensate for this – particularly investments and purchases from Singapore, Hong Kong, and increasingly, India, China, and the Middle East.
A weakening Thai Baht will further increase foreign investment as property prices decrease.
According to the Frank Knight report, Thai buyers will be active in all three market segments, with the strongest demand in the city fringes and suburban areas.
The report eludes to rising property prices due to rising wages adding pressure to prices and resulting in inflation. Rising inflation will be particularly evident in the construction industry. It is expected that the rise will be balanced by the internal and external factors; as consumers worried about general economic conditions will resist significant price increases.
Knight Frank forecasts price increase of two per cent in the suburban areas and four-five per cent in the CBD and city fringe areas for the year ahead.
by Property Report
Turmoil in the Middle East is only fuelling the fire of fear.
“Inventory of new residential property peaked in 2010 with approximately 70,000 new units.
“Due to the flooding and recent world events, developer sentiment for the future has turned cautious, resulting in decreasing supply for all market segments,” analysed Mr Schaefer.
Bangkok’s CBD area is limited due to the scarce availability of available land. The CBD area returns high values of property, average prices exceeding THB 100,000 US$ 3,176per sqm. Some properties in this exclusive area exceed THB 300,000 US$ 9,527.
Staggering prices and a land limitation issue have seen a surge in sales in the fringes of the city and its suburban areas as Thai buyers and expats seek more affordable units.
The fringes of the city and suburban areas offer a good supply of land and healthy competition within the areas market: keeping prices in check and making housing the most affordable in the Bangkok area. The Ratchada and the Rama IX area have seen strong demand. City fringe prices fluctuate between 70,000 (US$ 2,218) and 100,000 (US$ 3,167per sqm).
Across the board, however, property prices have been rising in Thailand’s capital.
The external affecting factors will keep over all sentiment of developers on the cautious side, according to Mr Schaefer. He expects the caution to be exercised until further clarification upon the global circumstances.
Foreign buyers from traditional European markets will be limited in their numbers. To some degree, new markets in Asia will compensate for this – particularly investments and purchases from Singapore, Hong Kong, and increasingly, India, China, and the Middle East.
A weakening Thai Baht will further increase foreign investment as property prices decrease.
According to the Frank Knight report, Thai buyers will be active in all three market segments, with the strongest demand in the city fringes and suburban areas.
The report eludes to rising property prices due to rising wages adding pressure to prices and resulting in inflation. Rising inflation will be particularly evident in the construction industry. It is expected that the rise will be balanced by the internal and external factors; as consumers worried about general economic conditions will resist significant price increases.
Knight Frank forecasts price increase of two per cent in the suburban areas and four-five per cent in the CBD and city fringe areas for the year ahead.
by Property Report
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