Soho Properties has recently concluded a deal with Ark Developments, offering buyers a unique opportunity of owning penthouse condominiums with breathtaking views of the ocean from the top of the world, commencing June 2012.

Following lengthy and complex negotiations with the Nepalese government, plans are now in place to develop a 50,000 rai plot high up in the Himalayan mountains, with technologically superior and advanced ecological features.

The construction is to be based on extending the basic principles to build simple but self-supporting tetrahedral structures, with the ability to protect, nurture, support and accommodate all needs of life.

Inspired by ideas first developed in the 1950s, the structure will use 70% less surface area as box-type structures. This means, with its natural feedback systems, almost no energy will be lost. There will also be no opportunity for heat to escape or outside air to penetrate. In addition, the spherical shape of this dome-type development will provide for natural and efficient interior air circulation.

Chris Heath, CEO of Soho Properties, and Noah Cubits, of Ark Developments, a world-renown philanthropist, are to jointly manage the project. Mr Heath commented on the project’s scale and depth: “Human habitation and evolution has never before owed so much to such refined technological innovation.”

Mr Cubits, in charge of the project’s construction, has commissioned a team of ecological experts to round up the world’s most evolutionary advanced species to participate in this brave new world, and will be accommodated in its southern slopes. Mr Cubits ventured: “It is not intended that sand and horse flies, mosquitoes and other pests will be invited.”

Mr Heath said that two-thirds of the condominiums to be built in the first phase of development had already been reserved; and that buyers were mainly from the world’s wealthiest families. The company has secured lifetime leases, which will include an array of golf courses, swimming pools, wildlife parks, restaurants and bars. It will also focus on a dynamic and exciting hiking culture, offering a rich and rewarding lifestyle.

Mr Heath concluded that the project will certainly help the Nepalese economy in three years’ time, just ahead of the 2012 debacle, and will act as a security haven for 250,000 residents when the world’s major cities and shorelines are under water.

It is envisaged that the social system will be largely communal, with operating officers responsible for the implementation of future developments, accompanied by a series of residential committees to act as advisory groups.

The developers have made it clear that all units will be ready to move into by the end of June 2012 at the latest in anticipation for the 21st December 2012 deadline.

[ NB: For your information, unless you haven't already guessed, the above story is a spoof on the film 2012 ]

The listed developer Supalai Plc plans to launch 10 new housing projects worth more than 10 billion baht in 2010, and at least four will be Board of Investment (BoI) Home projects, said president Prateep Tangmatitham.

The four BoI projects will include townhouses and single houses in Pathum Thani, while a BoI condominium will be located on a 10-rai site on either Soi LaSalle or Sukhumvit Soi 107, where it will develop about 1,000 units worth 1 billion baht.

“The economy is not that bad,” Mr Prateep said. “Interest rates are low and people remain confident in their income. The property market is improving and will be better in 2010.”

Given the improved sentiment, most of the company’s new launches will be in the first quarter next year. It plans to launch a condominium project in Phuket in December on a four-rai site with 600 units worth 900 million baht.

Next weekend it will launch two condominiums worth a combined 3.9 billion baht. One will be located on an 8.5-rai site on Ratchayothin Road opposite SCB Park that the company bought from SCB four months ago.

The project will comprise 800 units sized between 32 and 66 square metres and priced at 54,000 baht a square metre on average, starting at 1.9 million baht.

Another development, worth 1.5 billion baht, will be located on a 3.5-rai site near the Asok-Ratchadaphisek intersection. The project will consist of 500 units sized between 34 and 63.5 sq m and priced at 56,000 baht a sq m on average.

“We will launch these projects together to cut marketing costs by 20%,” said the company’s deputy managing director, Atip Bijanonda.

“We can share sales brochures and have a bigger impact on the market.”

In the past two weeks, the company has introduced the two projects to its existing customers to give them the privilege of choosing a unit first as well as a discount of at least 10,000 baht on each unit.The company expects to have sales of 50% on the launch date with 20% booked by existing customers. The projects should be sold out by the end of the year, said Mr Atip.

Supalai has also approached large corporate customers near the projects. For the Ratchayothin project, it gave SCB staff a 10,000 baht discount to book a unit.

Supalai reported a nine-month net profit of 1.81 billion baht, an increase of 113% from 854 million baht in the same period last year, on sales of 6.95 billion baht, up 51%.

Third-quarter net profit rose 187% year-on-year to 587 million baht, on sales of 2.29 billion baht, up 69%

The company had a sales backlog of 2.48 billion baht to be realised in the fourth quarter, while net gearing declined from 92% in 2008 to 63% as of the end of September.

Shares of Supalai (SPALI) closed yesterday on the Stock Exchange of Thailand at 6.00 baht, up 10 satang, in trade worth 35.58 million baht.

According to property sources in the UK, there are an increasing number of Asian investors looking to purchase property in the UK. Due to the drop in property prices and the large increase in some Asian currencies against the pound, it makes them more affordable and a sound investment.

According to the Guardian newspaper, the Nationwide has said house prices rose by 1.6% in August 2009: “The chief reason why house prices have not fallen by as much as many of us expected is that, unlike the early 1990s, interest rates are extraordinarily low. At the same time, banks are being more cautious about repossessions, because it’s the people who now own the banks.”

It seems that one of the main reasons house prices are rising again is that mortgage lending has not been extended to investors without significant deposits. The average price of a home is now £160,224 (nearly 9m baht), or 14.4% below the October 2007 peak. The Nationwide said a key factor in lifting prices was “the exceptionally low level of interest rates”, which have been kept at 0.5%.

Gary Smith, president of the National Association of Estate Agents, said: “The latest statistics from Nationwide appear to confirm that the housing market has finally bottomed out and indications are that we are hopefully moving to a point where the gradual recovery in prices witnessed this year will be sustained.

“With interest rates at historically low levels and unemployment on the rise, but when interest rates start to normalise, it could possibly result in a surge of properties coming onto the market as people are forced to sell. This, in turn, would mean that as higher interest rates emerge, finance will become more expensive, which will reduce demand and again apply downward pressure on prices.”

King Sturge, a leading supplier of property services in the UK industrial, office, retail, hotels and leisure, healthcare and residential sectors, are experts in residential land and mixed-use developments and also offer a complete range of financial services to the property sector.

King Sturge is the market leader in holding exhibitions across Asia to attract property buyers into the UK market. The team has a combined experience in excess of 45 years and counts all of London’s major housebuilders amongst its clients.

According to James Talbot, a partner in the firm: “We continue to hold successful exhibitions in Hong Kong, Singapore and Kuala Lumpur. We are also holding seminars on buying property in London. Since April this year we have sold in excess of £130m worth of London property to Asian buyers.” Due to the rising demand of London properties with Asian buyers, they have also started to look at other not so traditional areas. One of these areas is Thailand, where they have screened a number of local and International agents and have decided to team up with Soho Properties due to their in-depth local knowledge and enthusiasm.

According to Managing Director of Soho Properties Chris Heath: “As recently as October 2007 the Thai baht was worth seventy-three baht to the pound, today we have seen the baht grow in strength and the rate is currently 54 baht. This in turn has seen increased purchasing power for Thai buyers providing an excellent opportunity to invest in  a world City like London, a  city which has a foreigner-friendly policy including no capital gains tax, buying restrictions or selling restrictions.

As such, Soho Properties and King Sturge have agreed to work on London property exhibitions on an exclusive basis in Thailand. They have some exciting projects lined up for 2010, including a project by the well-respected UK property developers Berkeley Homes’  No1 Tower Bridge Road, which lies next to City Hall on the south of the River Thames adjacent to Tower Bridge and opposite the Tower of London — and in their opinion “the best residential developments to come to market for many years and undoubtedly likely to receive a huge international demand, particularly given  such a world famous address and location.”

Soho Properties set to become King Sturges’ sole agent in Thailand

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Source: www.propertywire.com

A new survey indicates where property investment experts reckon you can find the best bargains and also reveals where they are likely to buy in 2009.

Asia looks a better bet than other parts of the globe, but for cash rich individuals, London also offers bargains, according to the survey by Reuters.

Tim Murphy, Hong Kong-based founder of IP Global, owns over 100 apartments and houses around the world and started a firm that finds residential property for clients.

‘I’ve just come back from a trip to London and had a very interesting week. In the last few days there are even graver concerns about the UK economy and banks. But there are some incredible property deals, especially for built property,’ he said.

‘Developers want to unload their last assets. For the right deal, you can get anything from 35 to 60% discounts from a year ago. And the currency is a huge advantage. In US dollar terms, a property that was $2 million a year ago is $600,000 now,’ he explained.

In Asia, he recommends keeping an eye on Hong Kong and China. ‘Hong Kong will have a very difficult first half of the year. If there are bargains, I’ll buy, not now, but maybe after the summer. I’m quite optimistic long-term. Rents are coming down, but the cost of funds is coming down much more. If you buy a HK$2 million to HK$5 million dollar property the yield is 4 to 6%,’ he said.

David Edwards, Asia director for LaSalle Investment Management, the property funds arm of Jones Lang LaSalle said he will buy in 2009 and he is looking at the more volatile, faster correcting markets such as Hong Kong and Singapore, which he expects to bottom first.

‘It’s too early to say if it will be the second half of 2009 or the first half of 2010. There’s not enough visibility given the gyrations of panic. But it’s a good idea to build an equity position and get ready,’ he explained.

Aaron Fischer, head of property research at CLSA, is not sure if he will invest this year. ‘I just sold a house in Australia. If I were to pick countries with the smallest declines, they would be Japan and Indonesia. In Japan house prices don’t move,’ he said.

Brett McCarthy, fund manager at Sydney-listed Challenger Kenedix Trust, reckons that the Sydney market is a good prospect. ‘The city is going to grow for a long time and it’s geographically very constrained by national parks and mountains, so in the long term, you think the property price would go up in Sydney, but of course in the short term, some parts of the market have got a lot of pain,’ he said.

Robert Lie, Hong Kong-based Asia head for Dutch property investment firm Redevco, predicts that Asia will recover before other regions. ‘I’d say invest in China, but as a foreigner you have to live there 12 months before you can buy. I think Hong Kong prices will adjust pretty quickly and I do believe that if the global economy revives, Asia will recover first. There’s inherent scarcity in the market for land and apartments. And high-end prices will drop significantly, but they’ll come back,’ he said.

Simon Lyons, London-based joint CEO of Enstar Capital, revealed he has recently bought an apartment in the Swiss Canton of Vaud. ‘That outsiders can buy at all in Switzerland is a relatively new phenomenon. A limited number of property permits are granted to non-residents each year and only certain properties, primarily in tourist areas, are eligible for purchase, meaning demand is always ahead of supply,’ he explained.

Mark Callender, UK-based Head of Property Research, Schroder Property Investment Management, said it is not the right time to buy. ‘UK housing prices look about halfway down right now, so it’s not quite the right time to buy. And the expectation is for prices to drop by another 10 to 15% this year,’ he said.

Property experts look to Asia as offering best real estate investments for 2009

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Source: Bangkok Post

The listed developer Sansiri is expanding its reach overseas as part of a plan to cover every residential market segment.

Elvaston Place in Kensington is one of London’s most desirable addresses.

The company’s first international project is in London’s most expensive area, High Street Kensington. It has bought a 600-million-baht condominium on Elvaston Place, with six units sized from 60 square metres. Prices range from 60 million to 160 million baht. It plans to open sales next April in Thailand only.

President Srettha Thavisin said the London project would be a success as the company already had many affluent Thai customers. It is now studying other countries in Asia and Europe.

“We’ve been planning and studying the overseas property market, especially the UK, for the past five years,” he said. “We’ve decided to debut our first project in the the UK because property market there is on a downtrend which favours developers that have enough capital.

“Demand for high-grade residences is still high there coupled with only few new development projects due to limitations under the UK law.”

As well, the pound is weakening and a rising number of non-UK residents are buying homes for their children who study there. Demand for second homes in one of the world’s most attractive cities also draws buyers, he said.

Sansiri expects its overseas projects would lift its sales by 5% to 10% within three years.

The company aims to develop B-level residential projects in Thailand within the next three years in order to complete all market segments. Sansiri aims to develop 19 projects this year.

Shares of SIRI closed on Friday on the SET at 2.82 baht, up six satang, in trade worth 2.7 million baht.
Sansiri picks London for foreign debut

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Source: Bangkok Post

The property developer MR Sukhumvit Ltd expects improved political stability to help revive flagging demand in the luxury condominium market, says Arthur Choo, development and marketing director.

“The luxury market in Thailand is sluggish but in Singapore it is worse,” he said. “I think things look better all around the world now. In Thailand, political risk is more important than the economic situation as overseas investors have withdrawn from the country.”

As the market remained unfavourable, the company decided to freeze a development plan for retail spaces in front of its Millennium Residence luxury condominium project.

“If the market resumes, we can start it [development] and complete it within a year. It’s not that difficult,” said Mr Choo.

To date, 200 of the Millennium Sukhumvit’s 302 units in its two buildings have been sold for about 3.5 billion baht. About 30% of the sold units were bought by foreigners. As the company had collected 35% of unit prices as downpayments, the remaining 65% would be realised within the year.

Mr Choo said construction of the project, which will comprise four buildings, would be completed in November, when units would be transferred. Despite carrying the remaining units, the company is not worried about the sales.

Since August last year when the US financial meltdown began, the developer has sold only 20 units. It is now offering a discount of 5% to stimulate sales.

However, the discount has not hurt its margin as current prices were revised up from 110,000 baht per square metre on average to 130,000 baht now.

Developer sees revival in Thailand’s real estate

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Source: The Nation

Some of Thailand’s bigger landowners have begun serious studies of the government’s proposed Property Tax Act and are preparing to use or sell unused plots of land within the next three years before the new law becomes effective – should it be approved.

The sudden interest, revealed by a survey conducted by The Nation earlier this week, follows Finance Minister Korn Chatikavanij’s announcement of plans to seek Cabinet approval for proposed reforms of the property tax collection system before the end of this year, as a part of wider tax reforms.

Property developers and landowners have now become anxious to learn details of the draft law so they can manage their property holdings before 2012.

Pailin Chuchottaworn, CEO of integrated oil refiner and petrochemical manufacturer IRPC, earlier said his company planned to seek partners to operate or sell some its undeveloped properties, in order to reduce the possible property tax burden should the draft bill become law.

“We’re considering what we should do with these businesses. If there is a good opportunity for them to grow, we’ll keep them. If not, we’ll sell them,” he said.

KPN Lifestyle CEO Korn Narongdej, who, as the son of Kasem and Porntip Narongdej, is a member of one of Thailand’s larger landowning families, said his family had to study the proposed bill before it took effect.

“We don’t yet know about the details of this Act, but we’ll study it and maybe prepare our business before it comes into effect,” he said, adding that if the proposed law was implemented, the family would be willing to pay taxes accordingly.

Udon Plaza managing director Worapol Weerachatyanukul, whose company owns 200-300 rai of land in Udon Thani province, said his company was opening up its unused land for farmers to grow sugar cane. This move to manage the land was planned before the Finance Ministry announced its proposed changes to the law.

The family of beverage tycoon Charoen Sirivadhanabhakdi, which owns one of Thailand’s largest “land banks”, has also developed a business strategy to develop its land around the country, said a source close to the family.

The Sirivadhanabhakdi family has two property businesses: TCC Land and TCC Capital Land, the latter being a joint venture between TCC Land and Singaporean-based CapitaLand.

The source said the group had five master-plan projects worth nearly Bt100 billion to develop its land in various parts of the country. Before the proposed Act takes effect, the group will launch its plans to reduce the burden of the new property tax.

Following Cabinet and parliamentary approval, the government plans to introduce the new property tax next year, with a grace period of two years before it becomes effective in 2012. It will replace present household and local-government taxes levied on property, with a target of raising Bt60 billion to Bt70 billion a year.

Finance Minister Korn said the new tax measure, which should be ready for Cabinet approval later this year, would overhaul the property tax collection system.

At present, household taxes are based on revenue generated by a property, so unused land plots are not taxed, while local-government taxes are based on prices in 1971 and 1972, so the rates are very low.

The collection of local-government taxes currently accounts for only 10 per cent of the revenue of local administrative bodies. This compares with 70-80 per cent of local administrative revenue being collected in this fashion in developed countries.

The new property tax is expected to encourage the owners of large tracts of unused land to lease their properties for agricultural or other purposes, and this will help stimulate economic growth.

The Finance Ministry has set a maximum tax rate for property used for commercial purposes of 0.5 per cent of its appraised price.

The ceiling tax rates for property used for residential and agriculture purposes will be set at 0.1 per cent and 0.05 per cent of the appraised price, respectively.

Thailand’s proposed property tax

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The Nation: 2 August 2009

Rental charges for grade-A office space in Bangkok’s central business district are expected to fall significantly in the second half, having slid 2.5 per cent in the second quarter, says UK-based global real-estate firm DTZ.

However, the company’s research suggests the city’s retail and residential markets will improve significantly.

The company said the occupancy rate of grade-A office buildings in the CBD had declined for five consecutive quarters, due to both weakening demand and supply overhang from buildings completed between last year and this year’s second quarter that had yet to be fully taken up. The average occupancy rate of grade-A office buildings in the CBD fell 2.4 per cent in this year’s second quarter.

Deteriorating demand from the corporate sector has forced landlords to offer more concessionary terms to attract and retain tenants. Most landlords are now attracting tenants with various discounts and allowances to stimulate demand, but this has had little impact in the take-up rate, DTZ said.

Average grade-A CBD rents in the second quarter were 2.5 per cent lower than the previous quarter, at Bt652 per square metre per month. The “core CBD area”, including Wireless, Phloenchit, Rajdamri, Sathorn and Silom roads still registered the highest rents at about Bt700 per square metre per month, but even these were 2.1-per-cent lower than in the previous quarter.

The company said rental rates were likely to continue to decline through the second half on the back of a dim business outlook.

Demand in the office market is being driven largely by companies that aim to take advantage of the current market situation to acquire space at lower rates. However, the fall in rents will be mitigated by the low level of potential supply this year, because there are currently very few office buildings under construction in Bangkok’s CBD. Some 122,300 square metres of office space will be completed this year and next, of which 95 per cent will be in the grade-A category.

DTZ said that most landlords had kept retail-space rents stable, reflecting a more optimistic outlook in line with improved consumer sentiment. Average rent for grade-A retail space in the CBD remained at Bt2,280 per square metre per month. Rents for grade-A first-storey retail space in prime CBD areas were steady at Bt2,500 to Bt3,000 per square metre per month. Similarly, average rents in midtown and suburban areas held firm at Bt1,530 per square metre per month.

Following the improvement in consumer sentiment, many retail developers unfroze projects and continued development activities. Nevertheless, new retail supply this year will be slightly less than it was last year. At least 107,000 square metres of new retail space is expected to be completed this year and next, 44 per cent of which will be in the CBD.

DTZ said the Bangkok retail sector was expected to perform better for the rest of the year, because purchasing power and consumer sentiment continued to improve. Rents for grade-A retail space in prime CBD are expected to remain steady due to limited new supply, while midtown and suburban-area rents are likely to hold firm in line with healthier market conditions.

The firm said Bangkok’s residential market showed more signs of activity in the second quarter of this year, including more visitors to show flats and an increasing take-up rate. The government’s stimulus package continues to catalyse market activity, and attractive campaigns and discounted prices offered by developers are also helping to stimulate demand.

The average cumulative take-up rate of units launched by developers was 66.2 per cent in the second quarter, up 2.5 per cent quarter on quarter.

Despite the higher demand, prices were relatively unchanged in the second quarter because the secondary market had become more competitive, resulting in developers pricing their projects at more realistic levels to boost sales, DTZ said.

The average capital value for all grades of CBD condominiums stood at Bt82,000 per square metre at the end the second quarter, reflecting a drop of 0.3 per cent quarter on quarter and 0.6 per cent year on year. The average capital value for grade-A units in the CBD remained unchanged at Bt101,200 per square metre. However, average grade-A rentals declined 6 per cent quarter on quarter to Bt457 per square metre per month as a result of weaker demand.

DTZ said the Bangkok residential market was expected to continue to see good demand, with prices remaining steady, in the second half of the year. Development activity is expected to increase as developers’ confidence picks up and demand is likely to be boosted by an interest rate cut of 0.75-1 per cent, government tax incentives and more reasonable prices.

The residential market will be supported by domestic buyers the rest of the year, because foreign buyers are not expected to return until next year, DTZ said.

Bangkok office rentals down, improvement elsewhere

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Source: Bangkok Post

Business is still ticking-over, but extending the present tax breaks would help the industry

Hong Kong architect Eric Lai is one of many developers who are walking on eggshells in the present difficult economic environment and playing it safe. Mr Lai is now working on his third project in Thailand, La Royale high-rise condominium on Jomtien beach in Pattaya, after making a big splash in the capital with SV City and Empire Tower.

Mr Lai said his focus now is on consolidating and transferring the units in the completed beachfront tower and repaying the bank loan, and not on looking for land for future projects.

“At the moment there isn’t a lot of big news in the market and you can’t expect developers to make a lot of moves,” he said in an interview.

Despite the economic and political gloom of recent months, Mr Lai’s company, Wise Power Land, has managed to transfer 41 units in the tower out of the 116 it has sold. The tower has 165 units in all, but the company is reserving 15 of them.

Mr Lai has used the money generated from the transfers of 41 units to repay as much as 55% of the loans he has taken out for the project, and now owes around 200 million baht. The project has been valued at three billion baht and the 116 units sold so far amount to 1.4 billion.

He considers himself fortunate in that most of his buyers are still cash-rich and are real end-users, not investors or speculators who often back out when the going gets tough. The timing of the project was also very fortunate in that most of the units were sold before the economic crisis erupted last year.

However, other developers in Pattaya have been less fortunate and some of have halted or postponed their developments. “I think it’s really affecting Pattaya. As far as I can see only a few projects will be completed. Others, I think, will be held up for quite a long time.”

While sceptics question how many real buyers are in the market, Mr Lai says there is interest but it is in finished developments with titles ready for transfer.

“They are not going to take any risk. Prior to this I think quite a lot of them thought paying installments was almost like saving for the future, but now they will probably look at what is ready, pay and secure the unit.”

Wise Power Land has also seen a shift in its buyer profile over the past two months. The previous mix of mainly Scandinavians, Britons, some Americans and a few Thais is shifting to mainly people from Hong Kong.

“One interesting thing is that lately we have started selling again, even without advertising, but mainly lower-priced, small units.”

The few sales that took place from mid-May onward occurred despite uncertainty about whether the government would extend for another year the reduction of the special business tax from 3.3% to 0.11% and transfer fee from 2% to 0.01%. The extension was announced in March but implementation was delayed to mid-May.

“So several hiccups made it quite difficult for developers to transfer property on time. We had to tell customers, ‘Sorry, you have to wait for a while.”‘

Mr Lai hopes to launch La Royale’s second phase in September or October, marketing a few villa apartments on the beach in front of the high-rise tower. The company is keeping similar low-rise apartments at the rear to generate rental income.

Not wanting to do too much in this shaky environment, the company has put its project on the Malaysia’s Langkawi island on the back burner. Called Perdana Residences, this is a five-storey U-shaped resort hotel that is being converted into condominiums.

An encouraging sign that the current economic gloom might be lifting is that the property market in Hong Kong has improved lately after prices dropped substantially last year.

“Surprisingly, the Hong Kong property market has recovered quite a lot compared to early this year, it’s not like before as yet but it has recovered quite a lot.”

Where Bangkok is concerned, the market does not seem to be improving, but price declines have been modest. Even in Phuket, some transactions are taking place.

“A few months ago it was almost zero, but now it has come back to life and turned into a buyers’ market. There are people buying there, but they are selective.”

Mr Lai urged the authorities to consider further extending the special business tax and transfer fee waivers to help the property market get over the current rough patch.

“In general the government only has limited ways to stimulate the property market. For the local market, one way is for the banks to make it easier for buyers to get low-interest loans. But for foreigners I don’t think they can do much except making it easier to get visas.”

He points out that Malaysia has surged ahead of Thailand in this area with its “Malaysia My Second Home” programme that gives qualified foreigners a lot of benefits and makes obtaining a long-stay visa of up to 10 years a very simple affair.

It’s the right time for consolidation

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Source: Bangkok Post

Some property markets in the region are beginning to pick up

The significant upturn in three key regional property markets over the past couple of months has not helped Thailand, says Robert Collins, managing director of Savills (Thailand) Ltd.

Hong Kong, Vietnam and Singapore have begun to experience a property upturn mainly because of a more positive outlook on their economic environments.

Although there are concerns that the optimism could be just a short-term bubble, it is noteworthy that these three markets adapted far more readily to the downturn last year and are therefore more receptive to positive news.

“This is all helped by more positive lending policies by the banks so the investors and end-users are able to borrow money and stimulate the property market again,” said Mr Collins.

While the Thai property market is still stumbling along, he says it could indirectly benefit from rising prices elsewhere in the region.

For example, values of top-end products in Singapore are almost back to where they were late 2008 and this in turn makes Bangkok look good in terms of value for money.

“But it means that Bangkok will enjoy a very slow curve to recovery over an extended period of time rather than a fast track to recovery.”

Even though prices in Bangkok have slipped by 10-15%, they have come down very slowly. Mr Collins believes that if they had come off by 30% the Thai market would probably be on the verge of recovery because a lot of buyers are sitting on money waiting for a good opportunity.

“Those people are buying in Hong Kong, Singapore and Vietnam because it’s value for money there, they are not buying in Bangkok aside from a few isolated cases.”

The few good deals that have taken place in the Thai capital have not enabled developers to establish a pattern as to where the market actually lies.

Mr Collins expects the Thai market to enter a long phase of a weak trading environment. The 10-15% drop in prices takes the market close to the bottom with another equal plunge unlikely and this means it is indeed a good time shop around.

“If you’re looking to get into the market, now is a good time to buy with the other key economies in the region picking up. It’s not likely that the Thai market will slip further.”

However, he pointed out that Thai property investors need to hold properties for longer before realising profits compared with the other three Asian markets.

Both office and residential prices in Hong Kong have staged a dramatic recovery after a period of particularly rapid adjustment late last year. Strata-title Grade A office prices have risen by 25% year-to-date while luxury residential values are up by 15%, according to Savills.

The reasons include ample liquidity in the Hong Kong banking system but also in China where loan growth has been dramatic. Personal balance sheets are in good repair and households have avoided becoming financially overextended, having learned form the 1997-98 crisis.

“As long as interest rates remain at low levels [deposit rates stand at 0.001%] and quantitative easing ensures ample liquidity, it is hard to foresee a cooling of the rally before year-end,” said Mr Collins. “If, however, interest rates were to begin to rise before recovery had really begun to set in, then prices would soon begin to adjust downwards again.”

Turning to Vietnam, he noted that the Vietnamese stock market has been showing gains with the VN-Index doubling to more than 500 points in the period from March to June 2009. The Stock Exchange of Thailand, by comparison, is up by about 30% for the year so far.

“We have observed an increase in demand for high-end apartments in both Ho Chi Minh City and Hanoi markets. The resort market in Danang has also proved popular with local investors and shows signs of becoming a competitor to the Thai resorts over the coming years.”

In Singapore, meanwhile, it appears that cash-rich, high-net-worth individuals and companies are becoming increasingly active in the property market. Their interest is focused on mid-scale developments with affordable prices as credit remains tight.

“Together with buoyant sales in the primary residential market, these current deals done in the investment sales market may suggest a renewed confidence in Singapore’s property market,” said a Savills report.

“However, as there is no conclusive evidence of any firm economic recovery beyond early encouraging signs of an imminent bottoming out, we remain cautiously optimistic on the investment sales market in the near term.”

Regional expatriate investment that could have come to key Thai resort markets, namely Phuket and Samui and to some extent Pattaya, is now being diverted away but the flow is not going to any one destination.

The opening of the Hyatt Regency Danang Resort and Spa in Vietnam’s third largest city has been very successful and is expected to lead more developments there.

“That will draw some of the Hong Kong money because it’s a new frontier and it’s possibly more fashionable to get into Vietnam at this point in time than the tried and tested Thai resort markets,” said Mr Collins.

The Philippines is also getting some trade from Hong Kong but not the super high-end properties with buyers mainly going in for low- to mid-market condominiums in Cebu. This is absorbing some of the money that traditionally would have gone to Pattaya.

It is also certain that Malaysia’s “My Second Home” programme will attract buyers looking for freehold properties that will always be more desirable than leasehold.

“So rather than there being one particular destination that will cause the most diversion away from Thai resorts, I think it’s a mix. And if we add all those destinations together then it comes to quite a sizeable number that is being diverted from the Thai market.”

Mr Collins also mentioned that foreign developers who dabbled in Thailand have either moved on or are exploring other markets in the region, with Vietnam and Malaysia attracting the most interest.

“Thailand certainly has more competition going forward than it had previously.”

First signs of economic recovery in Thailand

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