Property sector likely more active in latter half of 2008

The Thai government’s economic stimulus package is expected to help boost property trading activities in the second half of this year, according to a leading real estate services agency.

Supin Meechucheap, president of Jones Lang LaSalle (Thailand) Co, said that although the government issued varied policies to stimulate the economy in the first quarter of this year, key external factors including surging oil prices and concerns over the global economic slowdown had undermined Thai economic growth.

It resulted in an unfavourable climate in property trading activities with the demand for housing and commercial building units growing at a slower pace since consumers’ purchasing power had declined.

Simultaneously, potential home-buyers are now being more careful in committing themselves to debt obligations from housing purchases and investors are more selective in investment.

In addition, rising oil prices had pushed up construction costs, which directly impacted the housing market.

However, she projected the state economic stimulus package would produce a fruitful result in the second half of this year.

Certain policies, including the lifting of a 30 per cent reserve requirement on short-term capital inflows, approval for extension of the mass transit routes, and tax reductions to stimulate the property business, all have a positive effect on the property sector.

However, she noted that the outcome of the measures would not yet be very effective unless there is firm action on oil prices and related global economic concerns.

Should the government to efficiently manage more effectively the impact of surging oil prices and risks from the global economic slowdown, she believed the demand in the property market would increase markedly in the second half of this year.

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John Davids John Davids
John Davids is a freelance writer for Thailand Real Estate & Property Guide and Thailand Real Estate Magazine
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