Property Market Expected To Plunge Regardless Of Spur
The property market is likely to face a plunge of 5-10% in 2009 as Thailand gets caught up in the global financial crisis, say experts.
This will lead to a credit constrict and lower buying power.
Even though the government plans to make two times the tax allowance on property sales from Bt100,000-Bt200,000 in 2009, that will only slightly improve buying power if probable home purchasers remain worried about their future income.
Fewer transactions are estimated in 2009, although apartment prices will drop 5-10% thanks to the government's expansion of tax incentives on property sales by one more year, to March 28, 2010, and a turn down in construction-material prices.
Supalai president Prateep Tangmatitham said buying power for purchasing housing projects had already fallen considerably in the fourth quarter of 2008.
“When the government raise the tax allowance from Bt100,000-Bt200,000, that will heighten demand for residences priced between Bt1.5 million-Bt3 million, making them more striking to acquire. Though, that will hold correct only for home purchasers who are certain about their future income," said Noble Development managing director Thongchai Busrapan.
However Naporn Soonthorn-chitcharoen, senior executive vice president of property-market leader Land and Houses, is less positive. He, too, considers 2009's property market will go down 5-10%, as a result of home purchasers postponing their decision to purchase out of apprehension about future incomes.
"The government will begin a new package to elevate the tax allowance. That will boost the disposable income of existing home purchasers, as their taxable income will be deducted. However it won't encourage fresh purchases providing potential home purchasers are still anxious about their future income.” he said.
Therefore, property developers must be cautious about their cash flow before growing their investment in 2009, he said.
A lot of home purchasers have chosen the housing projects that will be complete in 2009 after other projects faced construction postponement or were even poised after encountering new limitations on commercial-bank loans in 2008, he said.
This will lead to a credit constrict and lower buying power.
Even though the government plans to make two times the tax allowance on property sales from Bt100,000-Bt200,000 in 2009, that will only slightly improve buying power if probable home purchasers remain worried about their future income.
Fewer transactions are estimated in 2009, although apartment prices will drop 5-10% thanks to the government's expansion of tax incentives on property sales by one more year, to March 28, 2010, and a turn down in construction-material prices.
Supalai president Prateep Tangmatitham said buying power for purchasing housing projects had already fallen considerably in the fourth quarter of 2008.
“When the government raise the tax allowance from Bt100,000-Bt200,000, that will heighten demand for residences priced between Bt1.5 million-Bt3 million, making them more striking to acquire. Though, that will hold correct only for home purchasers who are certain about their future income," said Noble Development managing director Thongchai Busrapan.
However Naporn Soonthorn-chitcharoen, senior executive vice president of property-market leader Land and Houses, is less positive. He, too, considers 2009's property market will go down 5-10%, as a result of home purchasers postponing their decision to purchase out of apprehension about future incomes.
"The government will begin a new package to elevate the tax allowance. That will boost the disposable income of existing home purchasers, as their taxable income will be deducted. However it won't encourage fresh purchases providing potential home purchasers are still anxious about their future income.” he said.
Therefore, property developers must be cautious about their cash flow before growing their investment in 2009, he said.
A lot of home purchasers have chosen the housing projects that will be complete in 2009 after other projects faced construction postponement or were even poised after encountering new limitations on commercial-bank loans in 2008, he said.
Labels: apartment prices, Housing projects, property market
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