The gloomy prospects for consumers clouding post-coup Thailand's outlook, has led to a shrinkage in the housing market of almost US$6 billion for the 1st time after 2000 according to industry experts in the news on Taipei Times.
A fall of US$0.31 billion in the past four months to last month resulted in the first decline since 2000 in sales in residential real-estate market with a value of US$5.8 billion as reported by the association. Taipei Times published news that reported Atip Biianonda, president of the Thai Condominium Association saying, "People are delaying buying property due to a lack of confidence in the economy and politics."
Recent figures reveal that new home construction has been declining without respite. The slowdown in construction and sales is also creating a similar effect on rising home rates. The rise in home prices was barely 4 percent in the second quarter of 2006. Falling prices are affecting 20 percent of the country, particularly in places like Detroit, Cleveland and Buffalo.
Owing to the prevailing political and economic crises, average housing prices have already declined nearly 25 percent during the first quarter of this year. Initiatives taken by the government to reverse housing sales have not proved too successful due to the caution being exercised by the public in spending along with the reluctance of businesses to invest. The expectation for 2007 is a 20 percent fall in housing values.
In order to boost demand for housing, the military installed govt is set to implement measures with the purpose of bringing a revival in the real estate sector that include tax cuts. The Thai Bank resorted to a half-point cut in key interest rate to 3.5percent during last week while trying to reverse sluggish spending by consumers and slowing economy. This rate cut was the fourth in the year but business leaders urged the central-bank to further lower the rates as a means of stimulating the economy whose rise is perceived as 3.8-4.8 percent in 2007.
According to a research analyst at RNCOS , despite a lack of concern about finance among investors in the luxury and high-end markets, confidence is now lacking in market due to a number of adverse factors in politics, economy and society. Nevertheless, government initiated measures for support and increased confidence in the market are capable of bringing back investors to the Thai housing market rapidly.
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