In Era of Financial Crisis, more and more creditors have turned to outside the court system. The collapse of global economies from around mid 2008, and through into 2009, leading to recessions in many countries, has seen tremendous and hereto unheard of efforts by governments around the world to stimulate consumer and commercial confidence.
It is hoped that by doing so, the effects of the global financial downturn, will be minimized and that domestic stimulus, particularly in the world's major countries, will stop the downward spiral and contribute to a revival of the pre 2008 conditions.
Whilst this may be wishful thinking on behalf of some so called experts, the fact remains there has been a tremendous effort made by governments around the world, to halt the worsening economic conditions and do what they can to rebuild shattered confidence.
Using Australia as an example, we have seen a budget surplus in 2008 of more than A$20 billion wiped out as the Rudd Labour government has implemented steps to stimulate the domestic economy, whilst at the same time save jobs, and either prevent or at least slow down the unemployment figures.
West Australia which had seen a boom period for more than a decade has been impacted more than any other State in the country, and the mining industry, which had been responsible for much of the growth in employment has been forced to take action, and in the past two months alone has laid off thousands of workers and adopt ways of reducing their exposure to the downturn in exports of minerals to the huge China market.
This alone has meant employees from the eastern States of Australia, along with an estimated forty thousand workers recruited from New Zealand are facing hardship in meeting their day to day living costs, along with housing repayments, school fees etc.
The same story is being heard in many countries around the world, and India which is a market leader in IT services such as BPO and IPO call center's has also been hard hit as multi national clients reduce their budgets; in many cases substantially leading to termination of service contracts.
Even if the global markets were to recover in the next two quarters, (and that is highly unlikely) or even partially recover, it is increasingly obvious that the global collection industry is going to continue to see a huge increase in the levels of consumer and commercial debt, whilst at the same time the capacity to meet this increased debt will have reduced substantially, due to rising unemployment impacting on the consumers ability to meet their financial obligations.
The fall in consumer spending has already impacted adversely on retail sales and the forecast for this trend is for it to continue and to rise, which will see further retail outlets closing their doors, due to bankruptcy.
Equally, commercial markets such as commodities have been in a downward spiral for the past year, demand continues to lessen, and medium to long term contracts for supply of raw materials to the major manufacturing countries of China and India are being re-negotiated to reduce either quantize to be supplied or see the price negotiated downwards.
Further, there is a growing trend for fraudulent activity to occur in an increasing number of commercial business dealings, and we at GCS have seen in the past six months alone, a substantial number of what were lodged with us as commercial collection cases, actually requiring in depth investigations to determine what actions are open to the client's to attempt a recovery of monies owed to them.
In some cases, criminal actions have been quickly confirmed, thereby enabling liaison with police and statutory authorities; in other cases, assets have been locate against which legal action has been used to affect a successful recovery.
Whilst the perception of many in the media and the public at large, is that the collection industry is going through a boom time, the truth is that declining recovery rates (for reasons enumerated above) versus a rapidly increasing number of cases being lodged for collection, confirms what many experts in the global collection industry have often stated -.
?the good times suit everyone and when all is going well, people and businesses have the capacity and will to pay?.
The Australian Federal Government brought down its annual budget in Parliament last week, and has forecast a budget deficit in excess of $50 billion. What a difference twelve months can make, and the impact of globalization.
The current financial crisis has seen property prices plummeting in the West, and it is not surprising that many are expecting the same in Asia. However, does that mean that you, the home renter can now expect to pay less for your rent? If so, by how much? Many enquiries for luxury houses costing THB 150,000 a month seem to be coming from renters with a budget of only THB 100,000 or less. How realistic is that and what can one expect when it comes to property prices in Bangkok, Thailand?
Well, fact of the matter is that the residential leasing market here in Bangkok has not been affected in a very large way, expecially if you compare it to what's been happening in the West. Whether it will get to that stage is up for grabs but I seriously doubt it. 'How is that possible?' I hear you cry, and here I give my explanation.
First and foremost is that in general, rental properties, especially condominiums in Bangkok are owned by Thais, and have been bought as an investment property. The vast majority of Thais buy their properties, either investment or for residential purposes in cash, not using bank credit facilities such as a mortgage. Indeed, since the economic crisis of 1997, Thai banks have in general been very over cautious when it comes to granting loans and home loans have been very difficult to obtain. For a foreigner wanting to buy property in Thailand, while there are avenues to facilitate this, the fact is that is very difficult, and the interest rates are not too attractive. What all this means is that property owners in Bangkok don't 'need' a tenant in their property as much as , say a property owner in the U.K. who has a mortgage payment to furnish. Thai landlords tend to be more willing to let a property stay empty than to let someone insult them with a low ball offer. Of course, there are exceptions to this rule, and the longer a property is vacant, the more willing to negotiate most owners become, which brings me nicely onto ......
The property sales market is suffering here in Thailand, the same as everywhere, though certainly not to the same extent. The government's actions reducing the property transfer fee and special business tax has had a good effect, and combined with the fact mentioned above, that this is not a credit market, but more of a cash market, I don't foresee property prices falling a great deal in Thailand. You have to remember here that when people are not buying, they still need a roof over their head and this is the time when they rent and wait it out to see what happens next. This means that occupancy rates, especially in the Sukhumvit and Silom areas stands at around 88%. This figure varies slightly from quarter to quarter but in general, high quality apartments that are reasonably prices at market rent, continue to enjoy 100% occupancy, for most parts of the year. With most of the popular buildings still fully occupied, it is not surprising that rental prices are not dropping at the rate that many expect it to, given the current economic predicament.
Finally, even considering the political turmoil which has gripped the country in the last few months, including the ridiculous closure of the main international airport, the number of foreigners coming to Bangkok hasn't seen the huge reduction that was predicted.
Both Neil Wood & Maddy Barber are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Neil Wood has sinced written about articles on various topics from Debt Reductions. Neil Wood is a leading expert in the fields of , credit and risk management. With over forty years experience he has built Global Credit Solut. Neil Wood's top article generates over 1600 views. to your Favourites.
Maddy Barber has sinced written about articles on various topics from Vacation, Real Estate and Travel and Leisure. Maddy Barber runs an established real estate agency in Thailand with several branches in Bangkok and Hua Hin. We have hundreds of as well as. Maddy Barber's top article generates over 110000 views. to your Favourites.