Longlom Bunnag, chairman of Jones Lang LaSalle in Thailand, said a number of factors, including legislative changes seen as less favourable to foreign investment, had hurt confidence among local and foreign investors alike.

However, a common consensus among these investors is that the difficult situation that the Kingdom is going through now will last for only a short while, and the economy as well as the property sector will improve once a new general election takes place.

Longlom's view is supported by major acquisitions recorded in the Bangkok property market in the first four months of the year. These include acquisitions of a major office building on Sukhumvit Road sold to an undisclosed owner; a mixed-use building (retail and office), Amarin Plaza on Ploenchit Road, acquired by the Gaysorn Group; and a serviced-apartment building, the Mayfair Marriott in Soi Langsuan, sold to Gold Property Fund.

In the most recent instance, an Israeli property firm has reportedly signed a letter of intent to buy a suspended high-rise project in Bangkok.

"Even though the outlook of the Bangkok property market has softened this year, market fundamentals remain strong," said Longlom. "The slow growth in demand that the market is experiencing results more from a lack of consumer and investor confidence than it does a decline in spending power. We expect demand to recover in late 2007 or early 2008 once the political uncertainty is cleared up following the new election scheduled for December 2007. So do investors.

"Moreover, attractive returns have sustained interest on the part of both local and foreign investors looking for investment opportunities in the Bangkok market."