Thai government urged to support foreign property buyers with additional incentives
The Thailand Development Research Institute is calling on the government to support foreign property investors, by allowing them to bid for residential units. Nonarit Bisonyabut from the TDRI says the measure would be aimed at off-setting a shortfall in local demand. With foreigners usually having higher purchasing power than Thais, he adds that the number of units offered for bidding to foreigners should equate to the drop in domestic demand.
“Supposing demand shrinks from 10,000 units, the government may offer that number for bidding. This can also protect affordability for Thai buyers as bids from foreign buyers are likely to be higher than Thais.”
According to a Bangkok Post report, the TDRI says it expects demand for residential property to drop from 392,516 units to 334,530 this year, climbing back to 372,675 next year, and 403,138 units in 2022. Nonarit estimates the economic effects of the Covid-19 pandemic, coupled with Thailand’s aging population, will have weakened purchasing power within the property sector by 900 billion baht between 2020 and 2022.
He says the government can prevent an oversupply of property by attracting more foreign buyers, suggesting that the 49% foreign ownership quota be increased to 60 -70% in areas where unsold units exceed demand. He is also calling on the government to increase the leasehold period on low-rise houses from 30 years to 30 years plus 30 years of secure ownership, or 50 years in one registration
“Housing demand will take a few years to resume to the same level as 2019. A recovery will be seen in those related to government sector, wealthy people and purchasing power from each business except tourism.”
Nonarit adds that among the public’s concerns over Covid-19’s impact into 2021, the most prominent worries are of a prolonged global recession (over 58% of people) high unemployment (over 43%), and a second wave of the pandemic (over 40%).
He says the logistical effort required to administer new Covid-19 vaccines means tourists numbers next year will still be only half those of pre-pandemic times.
“With an estimate of 2.7 billion vaccine doses available within 2021-22, at 2 doses per head and the number of global tourists at 1.4 billion, half of all tourists will be back next year.”
SOURCE: Bangkok Post
