Thailand's property outlook for 2009 remains overshadowed by the global recession but several factors could help the industry weather the storm, according to local property consultancy Agency for Real Estate Affairs (AREA). While the local real estate industry depends heavily on overall economic conditions, the market has a better outlook this year than it had during the 1997 economic crisis, said AREA managing director Wasan Krongchan.

In 2009, Thailand's gross domestic product (GDP) in 2009 is forecast to grow by between zero and 2%. In 1997, GDP dropped by 1.4% and the following year it tumbled 10.5%.

Cash flow also remains strong and debt-to-equity ratios are relatively low, particularly for giant developers.

In addition, interest rates are currently at 6-7% and set to decline further, compared with 13-14% in 1997. Purchasing power still endures, with big developers continuing to launch projects.

Mr Wasan said that sales in 2009 might drop to 50,000 units, down from 65,653 in 2008. Back in 1997, sales plunged to only 10% of the pre-crisis volume, down to 20,000 from 200,000 units.

Sold units last year were 37% of total supply _ more than the 65,039 units sold in 2007 and 51,564 units in 2006.

Mr Wasan forecast that tax incentives and the low interest rate would be major factors in maintaining sales this year.

At the end of 2008, there were around 110,000 unsold units, compared with 150,000 during 1996-1997. But there are currently 45,000 units bought for speculation, around 10-15,000 units per year. From 1993 to 1995, there were 300,000 units purchased by speculators, around 100,000 units per year.

source : www.bangkokpost.com