Thailand Business News – Thailand Business News
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The Sofitel Silom hotel was sold to an associate of The Pioneer Global Group. The same associate, with a 49.5% stake in the Pullman Pattaya Aisawan Resort, purchased the 469-room hotel for 2.01 billion baht, or 4.3 million baht per key.
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Demand for Thailand Top Locations Remains
Thailand’s property sector is showing signs of an early recovery, as selective investors return to purchasing real estate stocks and actual property.
Some of the credit goes to a one-year government stimulus package that reduces the Special Business Tax from 3.3% to 0.11%, extends the reduction on transfer taxes from 2% to 0.01% and mortgage registration fees and provides a tax deduction on mortgage principal and interest.
Thailand’s property indicators show:
1.The Stock Exchange of Thailand (SET) index began rebounding in April 2009, and property stocks – while the first to fall in H2/08 – were amongst the first to recover
2. The Bank of Thailand (BoT) has lowered its policy interest rate four times since December 2008, prompting banks to reduce the minimum lending rate (MLR) from 7.25% to 6.25%
3. A continued drop in sales of durable goods due to uncertainty surrounding the economy is highlighted consumer confidence index (CCI) to a historic low of 72.8 in Q1/09 and New housing registrations in Bangkok and surrounding areas fell 43.8% in Q1/09
Thai property developers, despite being some of the first local companies to get hit by the global financial crisis, have shown resilience and delivered strong results for investors.
The market is based on people who will actually live in the units and less on speculators.
But a stable political environment in Thailand would likely see interest rates rise by half a percentage point. And oil prices will float at about US$85 to $95 a barrel. Construction costs will rise when oil prices and interest rates are in an upward trend. Overall housing supply has dropped over the past two years with a decrease in the number of construction permits. Many small-sized developers went bust after failing to access loans from local financial institutions.
