Thailand plans to relax rules on foreign ownership of property as a way to help boost its ailing property sector, crippled by over-supply. The deputy secretary-general to the prime minister, Poosana Premanoch, said the move would be part of a package to help soak up extra capacity in the market. Inability to sell property has left developers unable to repay loans, unsettling Thailand's finance sector. Mr Poosana said about 340,000 new condominiums remained unsold. 'We want to increase the purchasing power of the overseas market,' he said in Hong Kong. The Thai government would make visas easier to obtain, give foreign companies the right to fully own condominium complexes, and lower the amount of cash foreigners needed to invest in Thailand to the right to buy land. 'Lots of foreigners want to buy land. Last year we had 750,000 applications,' he said. 'We also plan to stimulate demand by introducing special discounted interest rates for staff who work for state and government-owned enterprises,' he said. About 2.5 million fell into this category. They would be offered the ability to borrow money at 9 per cent to buy property - the current rate is about 15 per cent. Mr Poosana said the government would like to find a way to extend that offer to 20,000 more Thais, through some sort of draw. 'I am confident the property problem can be solved in three to four years,' he said. On the financial sector, Mr Poosana said he thought there would be no more 'shocks' to the banking system. He forecast more consolidation among lending institutions which had bad performing loans. Contradicting rumours in foreign exchange markets about a devaluation of Thailand's currency, the baht, Mr Poosana said there would be no tinkering with its value. 'Devaluation would make our dollar-denominated debt more expensive,' he said. 'Secondly, it would not benefit exports because 40 per cent of our exports are import-related and things such as raw materials prices would rise.' On exports, he said it would take 18 more months before value-added industries made a significant contribution to the economy. 'In the short term, the agro-business will be the engine of growth,' he said. He forecast the current account deficit - one of the world's highest at about 8 per cent of gross domestic product - would fall to about 7.3 per cent this year. Mr Poosana's visit to Hong Kong is part of an international road show mounted by Thailand to show it is still in business. While many analysts continue to try to speculate about when Thailand's badly hit stock market will eventually stop falling, Mr Poosana's interpretation is simple. 'It has hit rock bottom,' he said.
