PROPERTY
Low hopes for state package
- By: POST REPORTERS
- Published: 14/01/2009 at 12:00 AM
- Newspaper section: Business
Executives count more on improving demand
Real estate executives anticipate "not much impact" from property stimulus measures to revitalise the overall outlook for the industry as the demand-triggering factors are consumer confidence and economic sentiment.
The cabinet next week is expected to consider new tax incentives and measures aimed at boosting the property sector and facilitating credit for homebuyers.
The new measures will complement earlier approved incentive measures to extend the reduction of specific business tax on property sales to 0.11% from 3.3% and on transfer and mortgage fees to 0.01% from 2% and 1% respectively until March 2010.
Suphin Mechuchep, managing director of property consultant Jones Lang LaSalle (Thailand), said the property stimulus measures increase the affordability of residential purchases and accelerate the decision-making process.
"However, we do not expect to see much impact from these measures as they are unlikely to restore consumer confidence hurt by the ongoing political uncertainty and softening economic outlook," she said.
"As long as consumers feel insecure about their employment and future income, they are unlikely to commit themselves to any loan burden."
She said the most significant issue facing Thailand's real estate sector now is sluggish demand following the global financial meltdown and its impact on the real economy.
"If the government's economic stimulus package can help improve the overall economy and consequently boost consumer confidence, the real estate sector will eventually benefit as its demand is tied tightly with the overall economic condition."
Opas Sripayak, managing director of L.P.N. Development Plc, said the stimulus measures would slightly accelerate homebuyers' decisions, but not significantly.
"The new incentives - an additional deduction on income tax and the extension of the property tax deduction will directly help dead stock," he said. He felt the measures should be for a certain period as anything unlimited will not rush decision-making.
Mrs Suphin said the government should look for ways to minimise impact from the global slowdown and launch initiatives to create jobs and boost purchasing power in all sectors.
The government should also launch measures to help boost the export and tourism industries, attract foreign investments and accelerate investment in infrastructure.
"Improvement in the overall economy will help boost demand in both the commercial and residential property sectors," she said.
In another development, a survey by Real Estate Information Center revealed that the housing developers' sentiment index nosedived to its lowest in five quarters, falling to 36.3 in the fourth quarter from 43.8 the previous quarter. The index, drawn from a survey of 147 property firms, dropped below the base point of 50 for the third consecutive quarter. The expectations index for the next six months also fell below the base point for the first time to 40.2.
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