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Thailand's property market is well insulated from the global financial crisis as it is far less dependent on debt than most property markets, said real estate firm CB Richard Ellis Thailand.
Chairman David Simister, as a longstanding player in Thai real estate and resort property, said Thai politics had been troubled for over three years so real estate investors have been cautious.
Purchases have been made for use or investment rather than short-term speculation, he said. Also, outside Phuket and Koh Samui, the bedrock of commercial success has been sales to Thai nationals.
"In my opinion, Thai market caution has resulted in the following: muted demand; a low level of speculation, despite rising prices; low borrowings to value; and possibly as low as 50% debt to current valuations, with buyers acting well within their financial capacity," he said.
Unlike in most western markets, Thai property is not propelled by the availability of debt finance. Nor are maximum mortgages the norm. Thai banks also have a strict approval policy, he said.
He added that the Thai banking industry learned a very hard lesson in 1997 and - both in project financing and domestic mortgages - prudence has since been the order of the day.
Unlike many foreign counterparts, Thai banks have stayed away from structured finance and concentrated on unadventurous domestic business, with property loans rarely reaching 70% of the banks' own valuations, he said.
Mr Simister added that foreign buying has been 100% in cash, as purchasing a condominium under the foreign quota requires buyers to show they have brought in funds from abroad covering the full purchase price.
"Thai real estate developed in the last five years has been a cash-driven market," he said.
Though optimistic, Mr Simister said his company had seen fewer launches and a lack of products for sale in some areas of Bangkok and Phuket.
"We expect this situation to continue for another 18 months," he said. "More importantly, with the bulk of products under construction having sold well, we see no chance of a market crash."
He said committed buyers continue to make serious property searches at its Phuket and Koh Samui offices but are finding almost no new high-end products.
"Given the lack of good oceanfront sites, we are bullish on the limited volume of developments that are proceeding," said Mr Simister. "Thai property has proved to be resilient to numerous external problems and I am convinced that it will prove to be, for tomorrow's buyers, an excellent medium-term investment."
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