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Developers Suspended 89 Projects in Bangkok 2013 Featured

Property developers suspended or cancelled the development of 89 residential projects in Greater Bangkok in the first half of the year, according to research by the Agency for Real Estate Affairs (AREA).

The agency said 18,404 units worth Bt45.81 billion had been affected, the majority by commercial banks declining to provide project financing or sales failing to achieve developers' estimates.

The research found that 8,567 of the units - 47% - were in condominiums in the process of being developed, while 4,598 units (25%) were detached housing and another 13% (2,414 units) were townhouses.

Detached housing showed the highest value, worth Bt20.35 billion or about 44% of total suspended projects worth Bt45.81 billion, followed by condominiums - Bt15.51 billion, or about 34% - and townhouses, worth Bt4.81 billion (11%).

Thirty of the 89 projects were suspended or cancelled after commercial banks rejected applications for project financing, while 21 projects were affected when sales failed to live up to expectations, and another nine failed to win environmental-impact-assessment permits.

A further eight projects were suspended because their designs needed to be changed, while another seven projects were put on hold as the developers considered increasing sale prices, said AREA.

Meanwhile, five projects were suspended or cancelled after the severe flooding in late 2011, while another three faced problems over land rights or the main entrance not matching the project design.

However, the number of projects suspended in the first half of the year is still lower than the 108 suffering a similar fate in the first period 2012, the research found.

"This is a normal problem for property firms, that is, launching projects that may be suspended or cancelled when problems are faced, but most of them also return down payments to customers when the projects cannot be built in accordance with the plan," said Sopon Pornchokcha, AREA president.

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