Thai real estate industry calls for incentives to prevent property downturn
|Wednesday, 29 October 2008|
The real estate industry in Thailand is asking the government to extend tax and fee reduction incentives for property investors in a bid to prevent a market downturn.
The country's real estate associations also called for the Bank of Thailand to cut interest rates and relax approval conditions for home loans.
And they urged the government to speed up investment in infrastructure projects which are regarded as necessary to stimulate economic growth amid fears that the tourist and property sectors could suffer a severe downturn.
Finance Minister Suchart Thada-Thamrongvech said the real estate tax incentives were set to expire in March but the ministry would consider their extension because real estate is a key sector in stimulating economic growth.
In particular the 300 kilometre mass transit transport network is regarded as vital for the expansion of tourism and its connected property markets in coming years.
Property professionals are watching the situation in Thailand but developers are confident that any downturn is unlikely to be severe.
'I do not see a direct impact on the Thailand property markets because it seems that Thai banks' exposure to troubled US investment banks is not that significant,' said Ramesh K. Hamal, CEO of Green Heritage Group.'
'However, we have to wait and see what ripple effect the crisis will have on the property market. The biggest worry is that, as a result of this financial meltdown, there will be fewer people with disposable cash to invest in lifestyle resort properties,' he added.
He expects areas like Phuket to remain globally competitive and Thailand could be a magnet for Americans and Europeans who want to invest in a growing market. But there are still edgy concerns about the political situation.
'The important thing is that Thailand finds a good solution to its current political crisis and that it does more to facilitate foreign investment - for example, by allowing 100% freehold ownership of condominiums by foreigners and extending the lease term from 50 to 60 years,' he added.
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