Property Business Grows At Slower Pace Last Year

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Property business grows at slower pace last year

BANGKOK: -- The overall property business last year expanded at a slower pace due to the expiration of tax measures issued by government to stimulate the business and upward interest trend, according to the Bank of Thailand.

The BOT’s Monetary Policy Committee (MOC) reported the property business in November last year slowed down given a marked decline in the approved areas for housing construction, cement sales, and the number of newly-registered houses.

The slowdown resulted partly from the fact that the calculation was made in light of the high growth base in the same month of the previous year when a lot of properties were transferred before tax incentives ended in December.

Still, competition in the business had intensified as could be witnessed by an increase in the building material price index over the housing price index in the fourth quarter of last year.

MOC found the property sector continued to grow in the fourth quarter without any sign of heating that could affect the overall economic stability.

In October last year the approved areas for housing construction in municipal areas dropped while the number of houses and condominiums registered in Bangkok and its environs increased.

However, the land trading value dropped by 11% from the same month of the year before since there was an acceleration of the land transfer to cash in on the cut in transfer fees before the end of 2003.

Suchada Kirakul, senior director of the BOT’s Local Economy Department, said a measure issued earlier by the central bank to control the speculation on the property was another factor that made the sector expand at a slower pace last year.

Under the measure, commercial banks that lent to home purchasers more than 10 million baht each and property development projects more than 100 million baht each are required to report the transactions to the central bank.

--TNA 2005-02-07