Bangkok Market Is Hot — Again

By JON E. HILSENRATH and PATRICK BARTA

Staff Reporters of THE WALL STREET JOURNAL

It was a familiar story from Golden Land Property Development PLC. With its 35-story Sky Villas condominiums nearly sold out, it unveiled plans for an even more lavish project. The Infinity features a replica of Rome's Spanish Steps, a spa in a restored historic mansion and faux-Venetian canals. About 90% of the units in the new development sold out in less than three months, even though some were priced at more than $1 million.

The project isn't in a hot U.S. real-estate market like Las Vegas or Miami. It's in Bangkok, where home prices are soaring, bank mortgage lending is climbing and developers are adding thousands of glitzy units.

The Infinity highlights a remarkable turnaround for a city whose property market went belly up in 1997, and it points to an important facet of this housing boom: It's global and, in some places, more dramatic than in even the most frenzied U.S. markets.

Over the past three years, measures of housing values are up 48% in France, 63% in Spain and they've nearly doubled in South Africa, according to data gathered from these markets from sources including the Bank for International Settlements, Economy.com and The Wall Street Journal. In just the past year, prices have risen 19% in Hong Kong and 48% in Bulgaria. They've also boomed in China, Australia and the United Kingdom, though prices are now showing signs of slowing in some markets like Australia and the U.K.

Americans are searching out castles in Umbria. Londoners are gobbling up beachfront property on the shores of Bulgaria. Europeans are finding dream homes on the Indian Ocean near Durban. And in Bangkok, eight years after the city's property market collapsed, Golden Land is seeking buyers from Thailand and abroad with a sales pitch that promises "an environment so opulent, only in your dreams could it be imagined."

"There is a tremendous amount of money floating around looking to invest," says Liakat S. Dhanji, the Nairobi-born chief executive of Golden Land.

Low interest rates — increasingly moving in sync around the world — are the clearest engine of this global boom. But there are many other factors tied into the trend, including the increasingly unconstrained flow of capital around the world, aggressive lending by banks here and abroad and a frantic search by investors, large and small, for returns that beat stocks and bonds.

Back to News & Media