Foreign investors and exporters also urged the government to gauge investor sentiment before implementing any new measures to slow down the baht's rise and to restore foreign investor confidence after the capital-control measure routed the stock market and left investors in shock.

Aliwassa Pathnadabutr, managing director of CB Richard Ellis Thailand, said that if foreigners were required to deposit 30 per cent of their purchase price with the Bank of Thailand for one year without interest, this would be very damaging to the condo market and present a significant barrier to demand for units from foreigner investors.

"Property is a reasonably illiquid asset that takes longer to purchase and to sell than shares, bonds and other financial instruments. Property is not a short-term investment and therefore should not be targeted in an effort to control short-term capital inflow. Any additional paperwork or approval to purchase a condominium will restrict demand and may be impractical to implement because of the timing issue," she said.

A foreigner has complained to The Nation that he had to delay the purchase of a Bt7 million residence due to the measure. His money was transferred into Thailand on Tuesday and subjected to the deposit. That means he has to bring in Bt2 million more to acquire the reserved property or he has to win a central bank exemption from the deposit requirement.

Aliwassa said that requiring Bank of Thailand approval to pay a non-refundable initial down-payment would significantly impact the sales process. Thousands of transactions are at stake where a down-payment has been made or contract has been signed for projects under construction and purchasers are still making monthly stage payments.

"We have been contacted by many foreigners who are concerned about not only how these regulations will affect their property purchases, but also what the effect will be in the medium to long term to the condominium market," she said.

The Bank of Thailand needs to clarify how these regulations will affect existing and future purchasers and what effect these regulations will have on the Thai property market, she said.

Following the immense impacts on Tuesday, Winston Doong, a board director of the Singapore-Thailand Chamber of Commerce, suggested that the government consult with foreign investors and businessmen before introducing any regulations.

Once the impact or damage is done, it is difficult to remove, he said. The government should hold a brainstorming session to consider what is the best outcome from the government's regulations.

Foreign investors are also disturbed by the baht's appreciation. However, the government should consider carefully whether its actions would affect other investors such as those in the capital market.

Some foreign investors have switched to other stock markets such as in China, Malaysia and Vietnam because of the measure imposed on Monday, he added.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, agreed with the government's immediate response to roll back the stringent measure to improve the situation in the capital market.

However, the government must seek a new plan to control the baht appreciation problem and protect the Kingdom from short-term speculators or the baht could move to Bt32 per dollar next year, said Chookiat, who is also the president of the Federation of Thai Capital Market Organisations.

Nipon Surapongrakcharoen, vice chairman of the Federation of Thai Industries, said the government was on the right track. Only some aspects of the measure were too harsh. He also noted that exporters should help themselves and not depend on the government to come to their assistance.

Pornsilp Patcharintanakul, deputy secretary-general of the Board of Trade of Thailand, said the government might want to take a pause before deploying further moves to control the baht's movement.

Thanawat Phonwichai, director of the Economics and Business Forecasting Centre, said the fallout from Monday's measure would be felt for six months. The government should monitor whether this measure can really help relieve the baht's volatility.

Petchanet Pratruangkrai

 The Nation