Developers should focus on selling their remaining condominium units this year rather than launch new products into an unhealthy market, said Aliwassa Pathnadabutr, managing director of international property agency CB Richard Ellis (Thailand).

"They [developers] should rather try to sell out existing units than launch new ones as selling prices of new projects can rise if remaining units are absorbed," she said. "If you launch new projects, your selling prices should be competitive, possibly meaning the prices may not generate as much profit as they could."

New units would pull down prices as the economic crisis continues to weigh down consumer sentiment, she said.

"The absorption rate for downtown condo units has dropped by more than half to about 30%, or 3,000 units, of the total remaining units since October last year," Ms Aliwassa said. "It is now better for developers to promote the sales of their remaining units as it would help limit the supply, which would also help the market pick up sooner."

Ms Aliwassa added that consumers remain cautious and are in no mood to buy condos - especially newly launched units, which would take longer to be delivered due to construction. Buyers also anticipate a drop in selling prices.

"The political situation has eased as we are already past its peak," she said. "Now it's the Hamburger Crisis that property buyers are watching. It's all about the economic situation."

The poor market has triggered a 40% plunge in foreign and Thai speculators. Long-term foreign investors and home-buyers remain in the market but are holding on for better prices.

However, Ms Aliwassa predicted that prices would not fall below the initial selling price because units entering the market were built last year when raw material and construction costs were soaring and land prices were also high.

"Although cutting prices would be advantageous, developers had better consider their real cost of production to reduce risk," she said.

"The situation here is not as bad as in Singapore or China, where residential prices have significantly dropped. As real demand still exists here, developers only need to offer some discounts at the beginning of sales."

Despite the reduction in political unrest, high-end buyers are keeping an eye on the economy to see if worse is on its way. Poor sentiment resulted in CBRE's 60% sales drop in the fourth quarter last year, she said.

The number of CB Richard Ellis's walk-in customers has also plunged to 600-700 a month from 1,000.

"Even though the high-end market is inevitably feeling the sting of the global financial meltdown, only a small proportion has been affected. We barely see cancellation of units. Those in trouble tend to resell them instead," she said.

CBRE is currently managing the sales of 12 residential projects worth 20 billion baht.

source : www.bangkokpost.com