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Foreign Investors Throw away Down Payments of Beachside Condos

TOC 4 March 2009

The economic crisis has spread to real estate in Thailand, as 20-30% more foreigners have abandoned down payments on beachside condominiums. Recovery isn't expected until 2010.

Real Estate Information Centre (REIC) Director-General Samma Kitsin said that fewer foreigners are buying, while increasing numbers have stopped paying down payments for beachside condominiums in Phuket, Pattaya, Hua Hin, and Samui. REIC is expecting the situation to intensify by the 3rd quarter as the US and EU economies worsen, along with the Euro's 20% decline.

Meanwhile, housing buinesses for low-income buyers in Samutprakran and Chonburi provinces' industrial areas are also struggling as more workers have been laid off.

Houses for middle-class buyers priced at 2-3 million baht are still selling well as tax cuts have alleviated buyers' burden. These houses should sell well even in the 4th quarter, after which the tax cuts expire.

Samma expects recovery to begin in 2010, as real estate sales have increased a little from the 4th quarter last year to this year's 1st quarter, thanks to house and condominium exhibitions and promotions by large real estate developers.

However, many smaller real estate companies have had to sell their unfinished projects to larger developers because loans have become harder to come by as banks become stricter.