Brad the Impala
December 21st, 2006, 12:25
Market for condominiums badly hit
The financial authorities' miscue on currency control will hurt the local condominium market, as foreigners would balk at paying the 30-per-cent deposit and that could delay transactions, CB Richard Ellis, an international property consulting firm, said yesterday.
Foreign investors and exporters also urged the government to gauge investor sentiment before implementing any new measures to slow down the baht's rise and to restore foreign investor confidence after the capital-control measure routed the stock market and left investors in shock.
Aliwassa Pathnadabutr, managing director of CB Richard Ellis Thailand, said that if foreigners were required to deposit 30 per cent of their purchase price with the Bank of Thailand for one year without interest, this would be very damaging to the condo market and present a significant barrier to demand for units from foreigner investors.
"Property is a reasonably illiquid asset that takes longer to purchase and to sell than shares, bonds and other financial instruments. Property is not a short-term investment and therefore should not be targeted in an effort to control short-term capital inflow. Any additional paperwork or approval to purchase a condominium will restrict demand and may be impractical to implement because of the timing issue," she said.
A foreigner has complained to The Nation that he had to delay the purchase of a Bt7 million residence due to the measure. His money was transferred into Thailand on Tuesday and subjected to the deposit. That means he has to bring in Bt2 million more to acquire the reserved property or he has to win a central bank exemption from the deposit requirement.
Aliwassa said that requiring Bank of Thailand approval to pay a non-refundable initial down-payment would significantly impact the sales process. Thousands of transactions are at stake where a down-payment has been made or contract has been signed for projects under construction and purchasers are still making monthly stage payments.
"We have been contacted by many foreigners who are concerned about not only how these regulations will affect their property purchases, but also what the effect will be in the medium to long term to the condominium market," she said.
The Bank of Thailand needs to clarify how these regulations will affect existing and future purchasers and what effect these regulations will have on the Thai property market, she said.
http://www.nationmultimedia.com/2006/12/21/business/business_30022112.php (http://http://www.nationmultimedia.com/2006/12/21/business/business_30022112.php)
The financial authorities' miscue on currency control will hurt the local condominium market, as foreigners would balk at paying the 30-per-cent deposit and that could delay transactions, CB Richard Ellis, an international property consulting firm, said yesterday.
Foreign investors and exporters also urged the government to gauge investor sentiment before implementing any new measures to slow down the baht's rise and to restore foreign investor confidence after the capital-control measure routed the stock market and left investors in shock.
Aliwassa Pathnadabutr, managing director of CB Richard Ellis Thailand, said that if foreigners were required to deposit 30 per cent of their purchase price with the Bank of Thailand for one year without interest, this would be very damaging to the condo market and present a significant barrier to demand for units from foreigner investors.
"Property is a reasonably illiquid asset that takes longer to purchase and to sell than shares, bonds and other financial instruments. Property is not a short-term investment and therefore should not be targeted in an effort to control short-term capital inflow. Any additional paperwork or approval to purchase a condominium will restrict demand and may be impractical to implement because of the timing issue," she said.
A foreigner has complained to The Nation that he had to delay the purchase of a Bt7 million residence due to the measure. His money was transferred into Thailand on Tuesday and subjected to the deposit. That means he has to bring in Bt2 million more to acquire the reserved property or he has to win a central bank exemption from the deposit requirement.
Aliwassa said that requiring Bank of Thailand approval to pay a non-refundable initial down-payment would significantly impact the sales process. Thousands of transactions are at stake where a down-payment has been made or contract has been signed for projects under construction and purchasers are still making monthly stage payments.
"We have been contacted by many foreigners who are concerned about not only how these regulations will affect their property purchases, but also what the effect will be in the medium to long term to the condominium market," she said.
The Bank of Thailand needs to clarify how these regulations will affect existing and future purchasers and what effect these regulations will have on the Thai property market, she said.
http://www.nationmultimedia.com/2006/12/21/business/business_30022112.php (http://http://www.nationmultimedia.com/2006/12/21/business/business_30022112.php)