The property market in Bangkok for 2007 using my 6 years experience on the field, is Flat. It’s so flat that even the walls are jealous!
In 2006 market prices increased a small amount, not breaking the 10% barrier, and the 3 years prior to that saw a sharp rise in property prices, but now prices are flat as a pancake.
The only chance of an increase is going to be fuelled by ever rising construction costs on new buildings, and of course greed. Everybody wants to make a profit after all. The age old; well I bought 3 years ago so I must add on at least 15% to the price I bought at, plus another 10% to cover transfer taxes and agent fees, let’s add on 25%. It doesn’t matter to these people that the economy is going down the drain, and what’s worse, 90% of the population think this way.
So flat is the new word on the street, and Thai women are now feeling very ample in the upper body area.
Following the 1997 crash in the Thai economy, pulling most other neighbouring countries down with it prices stayed high for a year or so. There is a typical time lag when people think that things will bounce back quickly, and hold onto their high property prices until they’re really desperate, and finally take half of what they were expecting. 1999 saw the trough in Bangkok property prices, and flat was the word back then for the next 3 or 4 years until woooomm, a good 3 year period of growth.
However, this time around the ‘flatness’ is being caused by slowly increasing interest rates and a whole bunch of new stock coming onto the market (a large supply), and construction is continuing strong. There is no fundamental problem in the Thai economy, which is still showing positive growth. Not so much growth as a few years ago, but maybe that’s a good thing. Maybe this is something a little more sustainable.
So I would not expect a fall in property prices, just a bit of ‘flatness’ for a while.