BANGKOK, Jan 14 (Reuters) - Foreign demand for condominiums in Thailand looks set to fall further this year, and that, along with unsold units carried over from last year, will put pressure on developers to delay existing and new plans, Raimon Land RAIM.BK said on Wednesday.
Raimon, almost half-owned by IFA Hotels & Resorts IFAH.KW and Istithmar Hotels, a unit of state-owned investment firm Dubai World, taps foreign demand for homes in Bangkok and property in tourist destinations such as Pattaya.
Average selling prices of high-end units would be stable or down slightly from last year’s 100,000-170,000 baht per square metre ($2,870-$4,880) as lower construction costs helped developers make the profits they had expected on projects, chief executive Nigel Cornick told Reuters.
“The first slowdown started probably around May and then it started falling sharply as we moved into September, October and November” he said.
“It’s a combination of the global crisis but more important is the political situation in Thailand, which has a greater impact.”
Developers were more likely to increase incentives to attract foreign buyers than slash their sale prices, he said.
“Prices will stabilise and in some projects there will be discount offers by developers,” he said. “I see stabilisation and some reduction in prices of high-end condominiums.”
The global financial crisis forced foreign buyers mainly from Hong Kong and Singapore to shelve ideas of owning a condominium or for investment, while a strong baht had reduced the purchasing power of core buyers such as the British.
“Those buyers are no longer thinking about buying a second home and are more concerned about preserving their first home,” Cornick said. ($1=34.84 Baht) (Reporting by Viparat Jantraprap; Editing by Alan Raybould)
Our Standards: The Thomson Reuters Trust Principles.