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PROPERTY
WICHIT CHANTANUSORNSIRI
Housing prices in the second half of this year will be higher than in the first half to reflect the rising price of construction materials, Finance Minister Surapong Suebwonglee said yesterday. He said that recently completed units would be in demand at the moment as buyers would rush to acquire homes built when construction costs were lower. However, he could not predict how much the prices would increase because it depended on the price of materials.
The government would work with Commerce Ministry to monitor construction materials to make sure the prices reflected real costs and were not excessively high.
In a speech about property trends at an event held by the Royal Institute of Chartered Surveyors (RICS), Dr Surapong said that the supply of real estate and construction activity had been declining since last year.
In the fourth quarter of 2006, he said, the property and construction sectors had year-on-year growth of around 5.5% and 2.6% respectively. However, by the third quarter of 2007, growth had declined to 1.6% and 1.4% respectively.
Both private and public investment on the demand side in the construction sector was also declining steadily. In the fourth quarter of 2006, private and public investment grew by 1.0% and 4.4% respectively from a year earlier. The comparable figures in the third quarter of 2007 were 0.7% and 2.1%.
In addition, statistics on building permits nationwide over the first three quarters of 2007 showed permits for both low- and high-rise housing totalling 32.3 million square metres, a decline of 12% from the same period in 2006.
In the first three quarters of 2007, registered housing completions in Bangkok and its vicinity were around 52,000 units, down 14% from the first nine months of 2006.
All of the figures indicated that the real estate sector was in a declining state, said Dr Surapong.
''Therefore, the government thought that it was very important to stimulate the real estate and construction sectors, which account for about 6.2% of overall Thai GDP,'' he said.
The government enacted measures in March to stimulate the sectors, such as the reduction in the special business tax from 3.3% to 0.1% and in real estate transfer fees to 0.1% for one year.
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