by wilbersuen | May 14, 2024 | News
Thailand’s economy is facing a “critical situation” that necessitates urgent stimulus measures and a potential rate cut, according to officials from the prime minister’s office on Monday (Mar 4). The country is striving to attract new investments from companies like EV maker Tesla.
Prime Minister Srettha Thavisin, who assumed office last August, is committed to revitalizing Southeast Asia’s second-largest economy, which has been hampered by weak exports and a slower recovery from the pandemic compared to its regional counterparts.
“Our data indicates we are not in good shape,” stated Prommin Lertsuridej, the prime minister’s chief of staff, highlighting issues such as low industrial capacity utilization and rising household debt.
Unexpected economic contraction in the fourth quarter of 2023 and a downgraded growth outlook for this year have intensified pressure on the central bank to heed the prime minister’s frequent calls for an interest rate cut.
Prommin, an experienced political strategist, noted that there is room for rate reductions, which would alleviate the financial burden on households by increasing their disposable income. However, he emphasized that the government would not interfere with the central bank’s decision-making process.
Srettha aims to position Thailand as a regional hub for various sectors, including electric vehicles (EVs), aviation, finance, and the digital economy. He has also urged lawmakers to enhance Thailand’s status in food, wellness, and tourism.
“We are taking all possible measures,” Prommin said, referring to initiatives like visa-free tourism, policies addressing household debt, and support for the vital agriculture sector.
A key election promise to distribute 10,000 Thai baht (US$279) to 50 million Thais for local community spending is in the works, with implementation expected by late May, he added.
Critics have expressed concerns that the government’s numerous measures, especially the US$14 billion “digital wallet” handout scheme, may not be fiscally sustainable and could fuel inflation.
Negotiations with Tesla
Thailand is in ongoing discussions with Tesla about potential investments in the country, an official from the prime minister’s office confirmed.
The government has proposed offering Tesla access to 100 percent clean energy for a facility in Thailand that could include EV and battery production.
“The decision now lies with Tesla,” stated Supakorn Congsomjit, without providing additional details.
Late last year, Tesla explored potential locations in Thailand, he added.
Traditionally dominated by Japanese automakers like Toyota and Honda, Thailand has recently attracted significant investments from Chinese EV manufacturers, including BYD and Great Wall Motor, totaling more than US$1.44 billion.
To attract more foreign investment, Prommin said the government is working on several initiatives, including easing visa regulations, amending laws to improve business operations, and upgrading both physical and digital infrastructure.
Source: CNA
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The editorial team at Invest Bangkok Property
by wilbersuen | May 14, 2024 | News
In the third quarter, Thailand’s economy expanded at its slowest rate in nearly a year, with experts predicting this sluggish trend will persist.
Official data released on Monday revealed that Thailand’s GDP increased by 1.5% year-on-year for the quarter ending in September. This figure fell short of the 2.4% forecast by economists surveyed by Reuters and was lower than the 1.8% growth recorded in the second quarter.
This marks the second consecutive quarter of slowing economic growth in Thailand.
“Public spending, inventories, and goods exports declined, despite strong private consumption and tourism,” noted Chua Han Teng, an economist at DBS Bank, highlighting that public spending capacity is diminishing due to populist policies.
Following a period of political stalemate and market volatility, Srettha Thavisin was appointed Thailand’s prime minister in late September. Economists foresee long-term economic recovery to be challenging under his leadership.
“The back-to-back quarters of weak GDP growth from the production side indicate an economy that is weaker than market sentiment suggests, despite strong consumption,” analysts at Bank of America Global Research stated in a report.
They also anticipated a more significant impact from tighter monetary policies moving forward.
In its September policy meeting, the Bank of Thailand raised its key interest rate for the eighth consecutive time, expecting economic growth and inflationary pressures to rise next year.
However, analysts at Nomura predict the Thai central bank will pause rate hikes at its upcoming meeting on November 29 and throughout 2024.
“We still see a risk of rate cuts as early as Q2 2024,” Nomura stated. “Importantly, the weak Q3 GDP results will likely strengthen the government’s push for a substantial digital wallet handout, despite uncertainties regarding its financing.”
A prolonged pause or potential rate cuts by the Bank of Thailand could also negatively impact the Thai baht, which has depreciated by 1.3% against the dollar this year and is on track for its fourth consecutive annual decline.
Source: CNBC
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The editorial team at Invest Bangkok Property
by wilbersuen | Apr 26, 2024 | News
A research firm suggests that the price index for new residential properties in Greater Bangkok is likely to continue its upward trajectory in the latter half of the year. This projection comes as older inventory gets absorbed following recent property stimulus measures initiated by the government.
Vichai Viratkapan, the acting director-general of the Real Estate Information Center (REIC), highlighted that the government’s new stimulus measures, particularly aimed at residential properties priced at 7 million baht or lower, are expected to boost housing demand significantly.
“We anticipate seeing the impact of these measures in the second half as they facilitate the clearance of older inventory,” stated Mr. Vichai.
Once the existing unsold units are taken up, developers are poised to introduce new supply at higher price points, consequently leading to an increase in the price index during the latter part of the year, according to Mr. Vichai.
The recently introduced property measures include a reduction in transfer and mortgage fees to 0.01% from the previous 2% and 1%, respectively, for units priced at 7 million baht or below. Additionally, there are reduced interest rates for home loan credit lines of 3 million baht or lower.
According to the REIC, the price index for new low-rise houses and condos available for sale in Greater Bangkok experienced year-on-year increases of 2.5% and 0.2% in the first quarter of 2024, reaching 131.5 and 155.0, respectively.
The index for low-rise houses marked its fifth consecutive quarterly increase, while the condo index rebounded from 154.3 in the fourth quarter of 2023 to 155.0 in the first quarter of 2024, after reaching 155.0 in the third quarter and 155.1 in the second quarter of 2023.
By category and location, the most significant year-on-year increase in the price index was observed for single detached houses in neighboring provinces like Nonthaburi, Pathum Thani, and Samut Prakan, rising by 3.9% to 134.5.
This upward trend has persisted for over seven consecutive quarters since the second quarter of 2022.
The rise in prices was particularly pronounced among projects launched in 2022-23, attributed to escalating construction material costs, as per the center’s analysis.
The area witnessing the most substantial increase for single detached houses encompassed the districts of Bang Phli-Bang Bo-Bang Sao Thong in Samut Prakan for unit prices ranging from 5.01-7.5 million baht.
Following closely were the districts of Lam Luk Ka, Khlong Luang, Thanyaburi, and Nong Sua in Pathum Thani in the 3.01–5 million baht range, followed by the districts of Muang, Lat Lum Kaew, and Sam Kok in Pathum Thani for units priced over 10 million baht.
The year-on-year increase in the price index for townhouses in these provinces exceeded that for single detached houses, rising by 4.1% to 133.8, rebounding from a decline in the fourth quarter of 2023.
The area experiencing the most significant increase in the townhouse category was Bang Phli-Bang Bo-Bang Sao Thong for unit prices ranging from 2.01-3 million baht, followed by Lam Luk Ka-Khlong Luang-Thanyaburi-Nong Sua, also within the same price range.
The price index for condos followed a similar trajectory to that of low-rise houses, with the most substantial year-on-year increase observed in neighboring provinces like Samut Prakan and Nonthaburi, rising by 1.2% to 143.2, according to the REIC.
The area witnessing the largest price increase for condos was the Muang and Pak Kret districts of Nonthaburi in the 2.01-3-million-baht range, followed by Bang Phli-Bang Bo-Bang Sao Thong with unit prices ranging from 1.5-2 million baht.
In Bangkok, the condo price index saw a marginal year-on-year increase of 0.01% to 157.7, with the most significant rise observed in the Huai Khwang-Chatuchak-Din Daeng districts for units priced between 3.01-5 million baht.
Second was the Thon Buri area within the same price range, while third was the Bang Sue-Dusit district for units priced between 5.01-7 million baht.
Mr. Vichai noted, “An improved economy can help enhance housing affordability and increase access to mortgages as housing prices rise.”
Source: Bangkok Post
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The editorial team at Invest Bangkok Property
by wilbersuen | Apr 25, 2024 | News
Record-breaking land prices in Bangkok’s central business district have led to unprecedentedly high prices for new luxury condominiums, according to real estate consultant Property DNA.
“This year, we’ve witnessed a surge in the introduction of new condo projects priced at over a quarter million baht per square meter, a rarity compared to 2019,” stated Surachet Kongcheep, managing director of the firm.
These ultra-luxurious condo developments are situated in prime areas such as Rama I, Phloen Chit, Wireless Road, Silom, Sathorn, Rama IV, specific segments of Sukhumvit Road, and along the Chao Phraya River.
Despite the steep prices, buyers are swiftly purchasing these units, with some projects reporting booking rates ranging from 65% to 85%.
High-rise condos near Lumpini Park are particularly sought after due to their rare views of the city’s green space. The absence of nearby train stations isn’t a deterrent, as many buyers prioritize privacy over convenience.
Surachet also forecasted that prices for new luxury condos will soon reach up to 600 million baht per unit, as major developers pay record prices for vacant plots in prime CBD locations.
An example of this trend is Sansiri Plc’s acquisition in 2020 of a 1 rai (1,600sqm) plot on Sarasin Road for 1.56 billion baht, setting a new record for land prices in Thailand. The company plans to develop a high-end condo on the site.
Property DNA also anticipates that affluent buyers will seize the opportunity to purchase luxury condos in mixed-use projects such as One Bangkok on Wireless Road and Dusit Central Park on Rama IV Road.
“Both Thai and foreign buyers have already displayed interest in these projects, even before official sales have commenced,” Surachet remarked. “Developers have also partnered with operators of five-star hotels to oversee these projects, further enhancing their value and prices.”
Source: The Nation
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The editorial team at Invest Bangkok Property
by wilbersuen | Apr 23, 2024 | News
Thailand’s Central Group has purchased the iconic KaDeWe property located in central Berlin from the insolvent Austrian firm Signa, marking another stride in its endeavor to acquire the entire group.
Central Group announced the acquisition on Friday, expressing optimism about ongoing discussions to obtain the complete KaDeWe Group, which encompasses Alsterhaus in Hamburg and Oberpollinger in Munich. Presently, the Thai retailer holds a 50.1% majority stake in the group.
Vittorio Radice, a board member of Central Group Europe, described the acquisition of the KaDeWe building as a significant initial milestone in their efforts to revitalize and restructure the KaDeWe Group operating company into a sustainable and financially viable business.
Signa Prime, the insolvent entity that holds shares in the KaDeWe luxury department stores, declined to comment on the matter.
The purchase price for the building, a popular tourist destination in Berlin, was reported by the German business daily Handelsblatt to be around 1 billion euros ($1.07 billion). However, Central Group did not disclose the amount it paid for the property.
Signa, founded by tycoon Rene Benko, has faced substantial setbacks amidst Europe’s real estate crisis, with creditors filing claims worth billions of euros. The group’s holding company, along with its two key units, Signa Prime and Signa Development, have all declared insolvency, underscoring the magnitude of the challenges faced.
Source: Reuters
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The editorial team at Invest Bangkok Property
