Problems confronting developers, banks, contractors and homebuyers remained, but the positive news was that all the parties have been trying hard to help each other solve the problems, especially in terms of debt restructuring. The momentum of low interest rates alone is not enough to spur demand. The housing market saw demand in 2000 as low as 40,000 units a year in Bangkok. Most analysts agree the property market needs at least three to five years to recover from its disastrous downturn in 1997.
Analysts agree the key to market recovery is stronger demand and a recovering economy.
Land prices continue to fall and housing prices have increased only slightly for brand new units due to higher construction expenses. At the same time, existing completed units were sold at big discounts. The problem of non-performing loans still has a negative impact on the property sector, forcing banks to rarely lend new credits to fund property projects. Almost all property developers, regardless of their size, have been busy restructuring their debts with creditors. Some listed developers could gain from the debt restructuring, seeing their balance sheets improve.