(BANGKOK) Property development in Bangkok is expected to drop 18 per cent this year as political turmoil and the global financial crisis hit the market, a leading property consultancy said yesterday.
Beneath the calm: An aerial view of the Chao Praya river that winds through the city of Bangkok. Thailand is suffering from both the global credit crunch and anti-government street protests which has caused overseas investors to pull cash from the Thai stock exchangeThailand's Agency for Real Estate Affairs (Area) predicts that the capital will see 66,783 new housing units built this year, compared to 81,364 last year.
Earlier this year, Area expected a drop of only seven per cent.
Profits from the sales of new homes in Bangkok are forecast to fall six per cent to 174.7 billion baht (S$7.3 billion).
Thailand is suffering from both the worldwide credit crunch - expected to hurt its exports to the United States and Europe - and anti-government street protests which began in May, raising fears of another coup.
Between the two crises, the global financial meltdown did most of the damage, said Area researcher Sarayut Khanay.
'I think now we have more effect from the economic problems outside of Thailand - from Europe, from the US, from Japan,' he told AFP yesterday.
Domestic political unrest, which erupted into bloodshed last month when police and protesters clashed, killing two people and leaving nearly 500 injured, is familiar to Thais, he said.
No matter the political climate, Thais know they need places to live, Mr Sarayut said.
Buyer demand has stayed high, with Bangkok residents looking for up to 80,000 new homes a year.
The trouble is not finding Thais to buy the new homes, but finding investors with the financial capital to fund new construction.
'It's more a problem of the money, compared to the buyer,' said Mr Sarayut.
The political crisis has had economic effects, causing foreign tourists to avoid the kingdom, industry experts say, and overseas investors to pull their cash from the Thai stock exchange.
The Thai stock market is down about 50 per cent since May 23, the last day of trading before an anti-government group launched their campaign. -- AFP
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