With the granting of the EIA for The Lofts Southshore, the project can now soar off to its completion with confidence, the main hurdle having been overcome. The project has already sold 90 units to date, showing that off-plan sales confidence is still present among canny investors, despite political upheavals.
Northpoint, too, is making significant progress, work having continued through Songkran and with the demolition of the beachfront sales offices, the initial work on the landscaping can start. Raimon Land’s newest project, The Edge, has just passed the conceptual design stage, showing good progress for the company as a whole in Pattaya. For the most part, Pattaya property development still appears to be on track, with prices still holding.
Prices are still holding in Samui and Phuket, too, where there is a distinct reluctance among developers to reduce prices. They maintain any reductions would be driven by investor leverage and the international and local ex-pat investors, who constitute most of the investors in these two resorts, do not have sufficient weight of leverage and developers would rather take developments off-line and put them on hold than offer substantial discounts. The situation may be different in Bangkok, however, as there the main investors are Thai, who do have the requisite leverage.
Some international property analysts appear wary of investing here, however, warning that there are potential risks in this region of Asia. They predict that the political instability is expected to lead to substantial property price reductions of 25-30%, especially in Bangkok. John Evans, Managing Director of Tractus Asia says “My personal opinion is that we are going to see some further political instability. The Thai market tends to lag behind the economy and political situation by at least a year if not 18 months. So I think we are going to see a big decrease, maybe even 25 to 30 per cent in residential property in Bangkok as there is an oversupply and more supply coming online.”
Whilst there may be a slight trend to discounting, Raimon Land is offering discounts of 5% on its Lofts Yennakart property as a sales incentive, for instance, this doesn’t mean there will be a wholesale drop in property prices, however .
Raimon Land’s main Bangkok project, The River, is continuing to make solid progress and is still selling well and holding its price. In-country analysts are far more optimistic than international analysts who may well be taking too pessimistic a view about the Thai property market, which has a large degree of high quality property and its prices are still competitive.
Consequently, when the global economic climate picks up, which observers foresee happening towards the end of this year and the beginning of 2010 and when the Thai political situation begins to settle down, the property market should once again regain its former international attractiveness.