Prospective buyers of homes and home furnishings are delaying decisions to buy because of the country's unpredictable political situation and this has eroded the growth of property developers and furniture manufacturers alike in the first two months of the year.

Modernform Group's executive vice president, Watana Usanachitt, said sales in January and February had fallen by about 10 per cent compared with the same period last year because most buyers are concerned about the political problems.

"Most buyers don't know what will happen when they're faced with a marathon political problem," he said. "If it takes time [to overcome the problem], maybe it will affect the economy and their earnings."

Given the market situation, the firm may have to adjust its sales growth target of 20 per cent for this year by reducing it to 10 per cent or 15 per cent, year on year, he said.

Modernform recorded sales of Bt3.1 billion and a net profit of Bt322.4 million last year.

Property Perfect's managing director, Chainid Ngow-Sirimanee, confirmed that in the first two months of 2006, nervous homebuyers had been delaying decisions to buy new houses not only because of the political turmoil, but because they are waiting to see what happens to interest rates, which show signs of rising again.

He said that if the political problem is solved quickly, his company believed home-buyers would be ready to begin buying. If a solution takes longer, Property Perfect may also have to adjust its sales target.

"If the political problems continue until the second quarter of this year, that will have a negative impact on property developers," he said.

Property Perfect helped launch a new promotional strategy yesterday when it signed an agreement with seven business collaborators to launch the Perfect Alliance Card, offering special packages and discount prices for home-buyers. The others involved are Modernform Group, SB Furniture Industry, Krung Thai Bank, Siam City Bank, United Overseas (Thai) Bank, Siam Commercial Bank, and TMB Bank.

Buyers who register for the card will get a special discount price and interest rates.

Property Perfect is aiming for sales of Bt8 billion this year, up 40 per cent from last year's Bt5.7 billion.

Siam City Cement's executive vice president for marketing and sales, Chantana Sukumanont, said her company's sales were down by 20 per cent in the first two weeks of March, compared with the same period last year. She said demand for new housing was down, so her company's customers were delaying construction on their projects.

If domestic demand continues to drop, Siam City Cement may seek to expand its export sales from four million tonnes to five million tonnes a year, she said.

Siam City Cement has a production capacity of 12.5 million tonnes a year - 8.5 million tonnes for the domestic market and four million tonnes for export.

SB Furniture Industry's assistant managing director, Tanatat Cha-waldit, said demand for new furniture in the first two months of this year showed only slight growth over last year because customers are concerned about the political problem.

Somluck Srimalee

The Nation