Offer prices for land plots in Bangkok have dropped by an average of 20% from their peak and have plunged deepest in emerging locations like Ratchadaphisek, Srinakarin and Onnuj, said Sahatchai Kwancheun, vice-president of property consultant Harrison Plc. These emerging areas have seen a sharp decline after prices soared during the property market boom. Some locations saw a rise from 40,000-50,000 baht to above 100,000 baht per square wah. But limited supply will prevent prices falling below those before the boom, said Mr Sahatchai.

On Sukhumvit Road land prices had been approximately 150,000 baht a sq wah in 2003 and then rose to 700,000-900,000 baht in 2007, he said. Some plots used to have an asking price _ open to bargaining down by as much as 30% _ of up to one million baht a sq wah in 2007.

Over the past quarter, though, this land has been priced down to 700,000 baht a sq w. Mr Sahatchai described this as ''a suitable level''. He said buyers would also have room for bargaining of around 5-10%.

''Buyers now have more room to negotiate the price,'' he said. ''In an economic downturn, buyers and investors will get better prices. They will be able to stockpile land plots for future development as in the post-1997 recession, when investors bought plots for development in a few years after an economic recovery.''

He said prime locations on Sukhumvit Road should now be priced no higher than 400,000-500,000 baht a sq w, while those in Soi Sukhumvit should be around 300,000 baht.

Prices of other assets like condominium units have sunk by 10-15%, he said. In Pattaya, a condominium project has been discounted by 60% due to weaker demand from foreign buyers.

Around 70% of plots offered for sale through Harrison belong to non-developer landlords who need to convert their assets into cash during a slowdown.

''Some of them [landlords] have various businesses like small or medium-sized enterprises or exporting and have felt a heavy impact from the global recession,'' said Mr Sahatchai.

The other 30% of plots are owned by developers that had planned a project but lost confidence in the economy or were uncertain of getting a project loan from financial institutions.

Harrison yesterday opened a sealed-bid auction for 31 assets with a combined appraisal price of six billion baht until Jan 30. The assets include land plots, hotels, office buildings, condominiums and apartments in Bangkok and a land bank in a resort area.

Mr Sahatchai said there were three or four buyers interested in joining the bidding. These include cash-cow investors and also non-listed and small-to-medium-sized developers with fresh funds.

With nine marketing activities this year, Harrison aims to achieve seven billion baht in sale over the year, as in 2008. The brokerage business is less affected by a downturn as there are many assets offered for sale at lower prices

source : www.bangkokpost.com