Despite a clarification that foreign purchases of property in Thailand would be exempt from the central bank's tough new reserve requirements, activity is likely to be limited for a month or so as foreign investors await a more stable baht and better sentiment. Longlom Bunnag, chairman of the real estate agency Jones Lang LaSalle (JLL), said the Bank of Thailand should have set the measure as a policy instead of a regulation, which had a wide impact. The impact was felt most severely in the stock market, but property also suffered.
''The BoT announced its regulation without details and careful thought about the overall impact, which caused chaos even in the property sector, which should not have felt the impact,'' he said.
JLL itself was affected and now anticipates a delay in concluding an 850-million-baht deal that was supposed to close by Jan 15, he said. The investor in question wants to buy 45% of a condominium project.
Mr Longlom said everyone was now watching the direction of the baht to see whether it would depreciate further as a result of the capital controls. Few investors want to make commitments until they see signs of the baht stabilising.
''Deals in property investment would be interrupted for at least a month,'' he said. ''Sentiment is more important as buyers will wait for a weaker baht before concluding a deal.''
However, he agreed that the measure could bring about a positive result with more foreign investment in the property sector in the longer term due to the weaker baht.
Aliwassa Pathnadabutr, managing director of CB Richard Ellis Thailand, said the Bank of Thailand clarified yesterday that property including land and condominiums would be exempt from the reserve requirement on short-term capital inflows. Foreign purchasers of condominiums can bring funds into Thailand to make purchases but buyers should clearly state the project name and unit number when remitting funds, she said.
''We welcome this clarification which means that foreign property purchasers are not affected by the new regulations. We believe that this will reassure existing and potential property purchasers,'' she said.
There are still many foreigners who want to purchase condominiums in Thailand, both to live in and as long-term investments, she said. Bangkok Post Dec. 06