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Sub-prime woes won't affect Thailand: executive

January 30, 2008

Sub-prime woes won't affect Thailand: executive

The sub-prime lending crisis in the United States will not escalate to the extent that it could adversely affect the Thai property sector and overall economy, according to an industry executive in Bangkok.

Sophon Pornchokchai, chairman of the Agency for Real Estate Affairs Co, said as a property price estimator he believed the sub-prime mortgage problem will not worsen to the extent that could affect the global economy, including that of Thailand.

He was confident the US government would be able to cope with the problem since the data showed that low-quality loans represent only 20 per cent of the total loans in the country.

So, Mr. Sophon said, he did not want Thai people to panic about the sub-prime lending crisis.

He said the Thai property sector would not be affected by the sub-prime mortgage problem since most Thai people purchase houses for living, not for speculative purposes.

The executive also believed investor confidence would be restored once the new elected government is formed.

At the same time, a construction of new electric rail route projects would bring about new locations for city condominiums.

"We believe condominiums to be built along the new electric rail routes will be a key factor to the property growth of up to 10 per cent this year," he said.

Nachada Thanapat, an expert in investment in the US property market, said it is expected the sub-prime lending woes would make property prices in the US fall until July this year.

After that, prices would recover and increase again early next year. So, it is appropriate to invest in the US property now, she said.

Courtesy TNA

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