Labourers work on the Dubai Tower, a skyscraper under construction in the emirate. Many markets were spooked and investor confidence was severely shaken when Dubai World, the state-owned realestate and ports giant, sought a debt moratorium.
Dubai's property crash is unlikely to have a major impact on the region's market, although foreign buying could slow.''We are currently focusing on markets in the region and are undertaking roadshows to tap the robust growth being seen in the Asian markets,'' said James Duan, the chief executive of Fragrant Property Group.
Mr Duan, whose company has developed projects such as Prime 11 and The Circle on Phetchaburi Road, said the shift towards a growing upscale client base in this part of the region is essential for real-estate developers looking to sell their 49% foreign quota.
The economic crisis saw the appetite for residential units from the traditional
markets such as the Middle East, Europe and US all but dry up, forcing developers to seek new customers that can afford upper-end projects.
''We are also planning to conduct a roadshow together with strategic partners such as Krung Thai Bank Plc (KTB) and Samitivej Hospital to 10 countries in Southeast Asia and the Middle East, such as Myanmar, Vietnam, Dubai, Cambodia and Singapore, where the potential investors are there and they are looking for investment in markets,'' he said.
''The advantage of Thailand is that it has a very good service sector, while the property prices are low when compared to other regions in this part of the world, and to top it all off we have good support from the government and strong economic fundamentals.''
Many markets were spooked and investor confidence was severely shaken when Dubai World, the state-owned real-estate and ports giant, sought a debt moratorium. But property experts expect a lack of supply to maintain equilibrium and prevent property prices in Thailand and the region from plummeting.
CB Richard Ellis Thailand managing director Aliwassa Pathnadabutr said condominium sales to foreign investors were quiet in the first half of 2009.
Foreigners made up only 13% of con dominium buyers in the first half of 2009, down from an average of 34% in 2008. Most foreign purchasers were resident in Thailand.
''Activity has gradually improved since the third quarter,'' she said. ''We have seen foreigners starting to buy again in the Thai condominium market and we believe the situation will improve further as condominium prices in Bangkok have not rebounded yet so there is more room for upside potential than in other cities in Asia.''
Property sales in Thailand and across the region have started to turnaround, said Mr Duan.
Ms Aliwassa said Dubai's problems are unlikely to impact the property market in Thailand or the region.
On the other hand, Mr Duan expects some fallout from Dubai but has seen a gradual return in buyers _ who are often Asians _ in most Asian markets.
Ms Aliwassa sees different situations in each sector of Asia's property market. In general, the Asian office market is still in a down cycle, even though leasing edged up after a quiet first half in 2009.
The CBRE Asian Office Rental Index recorded the pace of decline as slowing to 3.1% in the third quarter from 6.7% in the second quarter of 2009. Rental is expected to bottom out in the fourth quarter. Office leasing in Bangkok has seen a similar situation, but with a much smaller decline due to limited existing and future supply.
Nevertheless, Ms Aliwassa said the Asian luxury residential market gained momentum in the third quarter as market sentiment strengthened and other supporting factors became available, such as cheap financing, easier access to credit and government stimulus packages.
Property prices and sales volumes have climbed since the second quarter, especially in key Asian markets such as Hong Kong, Singapore and Guangzhou, where prices have increased by 12% to 16%. Beijing, Shanghai and Seoul have also seen a steeper increase since the second quarter, she said.
In Bangkok, luxury condominium transactions increased significantly in the third quarter, while prices had already bottomed out, she said.