Thailands Property Market Slows Down Since Military Coup

[george]

Property market slows down since military coup

BANGKOK: -- The overall property market in Bangkok has slowed down one year after the military coup was staged, dampened by the imposition of the 30-per cent reserve requirement and the amendment to Foreign Business Act, according to Jones Lang LaSalle, the world’s leading real estate services and money management firm.

Dan Tantisunthorn, head of the company’s Research Division, projected the property market direction would not change significantly until the general election is held and the new government formed. Events that took place unexpectedly in the post-coup period such as the capital control measure and the FBA amendment had a negative impact on the property market.

The FBA amendment had adversely affected the property business most, particularly the rent for space areas of commercial buildings and shopping centers, since multinational firms including giant retailers slowed business expansion to see impacts of the amendment on their business operations.

At the same time, new multinational companies had come in to invest in Thailand in a smaller number because they are uncertain about the policy direction.

He said the proposed FTA amendment had challenged institutional investors since a definition of business operations by foreigners is broader.

Actually, existing FBA states clearly foreigners are prohibited to own land, except in some cases.

However, Mr. Dan said, many parties still hoped the amendment would not be made until the new government is formed in the post-election period.

--TNA 2007-09-21