Economy

Thai government urged to support foreign property buyers with additional incentives

Published

Wednesday, December 9, 2020 10:20

PHOTO: www.thailand-property.com

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

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27 Comments

no house owner

Wednesday, December 9, 2020 at 10:34 am

Sorry Thailand. But how you denied foreigners to return to their owned properties while covid for months there is no thrust to invest here anymore. I love Thailand but I’ve canceled all plans to invest big cash here as I don’t like the risk of an expropriation. I keep it on my farang bank account and pay the rent wherever I currently am, finish.

Reply
- Toby Andrews
  
  Wednesday, December 9, 2020 at 11:45 am
  
  Very wise.
  
  Reply
  - Rasputin
    
    Wednesday, December 9, 2020 at 12:24 pm
    
    Good God I’m agreeing with Toby, but his advice is excellent. The biggest problem is western bank accounts are paying virtually no interest on accounts, but properties are tumbling in price, and I don’t see a recovery for a couple of years (or longer)
    
    Reply
- Alte Ledertasche
  
  Wednesday, December 9, 2020 at 12:20 pm
  
  Spot on. Never buy anything in LOS what can not get rid off with minor financial losses in 1 week time.
  
  Reply
- Issan John
  
  Wednesday, December 9, 2020 at 2:54 pm
  
  Sorry, n h o, but very, very few countries give any right to residency just because you’ve bought property there, and those that do put a reasonably high price tag on it.
  
  Does your own country do so?
  
  So why should Thailand?
  
  Reply
  - Peter N
    
    Wednesday, December 9, 2020 at 5:32 pm
    
    The UK allows foreigners to own property without having right of residence. As a foreigner you can buy property in the UK, even if you do not live in the UK. That said, buying property in the UK as a foreigner is easier if you are a cash buyer – i.e. do not need to apply for a mortgage or additional borrowing as it may be difficult to apply for such a mortgage.
    
    Reply
    - Preesy Chepuce
      
      Saturday, December 12, 2020 at 9:15 pm
      
      Rubber Plantation Johnny doesn’t really do property advice, otherwise he’d know that most jurisdictions that let foreigners buy property, also give residency and tax relief for it, it’s part of the whole business model of caribbean tax havens. Thailand is not competing.
      
      Reply
      - Issan John
        
        Tuesday, December 15, 2020 at 1:17 pm
        
        “most jurisdictions”?
        
        Absolute rubbish.
        
        Name any in the West that do, below pretty considerable limits.
        
        Any at all …
- Mike Frenchie
  
  Wednesday, December 9, 2020 at 4:57 pm
  
  Expropriation risk is very little if you buy in the foreign quota… never buy in company name for example. The risk is more to have juristic offices (co-ownership of condos) going bust since many co-owners are not coming back and paying their fees! Having a condo without pool and gym… etc. is not really appealing.
  
  We still have 20-25% downside until next Spring… I may buy some extra units in selected condos afterwards.
  
  Reply
Alte Ledertasche

Wednesday, December 9, 2020 at 10:37 am

I personally would not recommend anybody to buy property simply because the quality is substandard and prices are a rip off. Proceeding are even if promisses from developers kept are low due to taxes and management fees.

On top of that I would never ever buy a house where I can ont own the land legally as a foreign individuum.

There are other places on this planet to invest in property which provide a much safer framework.

Reply
EdwardV

Wednesday, December 9, 2020 at 10:53 am

“Demography is destiny” and the future demographics of Thailand are not great. As pointed out they have a rapidly aging population. the World Bank forecasts a contraction of about 10% in the working-age population between 2010 and 2040. A contraction of the work force in a still emerging market country is not a good combination. Usually results in economic stagnation. While property values have risen in the past, it’s more doubtful going forward. Which is the entire reason Thailand is considering this move. I would say it’s at best a short term investment, and probably not even that.

Reply
J West

Wednesday, December 9, 2020 at 11:17 am

The financial interests of the buyer are not being considered in this scheme. Normally there is only one reason to buy real estate, Regardless of the location, and that is when prices are firming with an upward bias. Not the case in Thailand. Catch this falling knife at your peril. Coupled with the extreme nationalistic barriers to full ownership where “ dirty farang” are held as beneath contempt, and right to occupy through an arbitrary visa scheme exists, an investor has pause to consider another opportunity.

Reply
Toby Andrews

Wednesday, December 9, 2020 at 11:54 am

Avery risky proposition for foreign money.
If any are determined to buy, they should wait two years and property could be a third cheaper.
Thailand has lost credibility and trust.
There is no knowing what the government will do next to loot the foreigner.

Reply
Rasputin

Wednesday, December 9, 2020 at 12:36 pm

Good God I’m agreeing with Toby, but his advice is excellent. The biggest problem is western bank accounts are paying virtually no interest on accounts, but properties are tumbling in price, and I don’t see a recovery for a couple of years (or longer)

Reply
Peter

Wednesday, December 9, 2020 at 2:21 pm

If their is one positive out of this whole mess it is to once and for all highlight you should not buy property in Thailand.
Furthermore, unless you are a Thai citizen, all visas are at the whim of the Thai government, has some on this board have discovered.
Keep and rent out property in your own country, use the income to rent in Thailand.
Most importantly, this gives you an exit strategy from Thailand and an asset in your
own country and currency.

Reply
- Issan John
  
  Wednesday, December 9, 2020 at 3:12 pm
  
  “Furthermore, unless you are a Thai citizen, all visas are at the whim of the Thai government, has some on this board have discovered.”
  
  Wow. Did you manage to work that one out for yourself?
  
  That Thailand is actually responsible for Thai visas?
  
  ….. not some some other country that can issue visas for Thailand as well?
  
  Good God almighty ….. name any country in the world where that isn’t the case!
  
  Reply
  - Toby Andrews
    
    Wednesday, December 9, 2020 at 11:15 pm
    
    What Peter was trying to point out that the visas were issued at the whim of the government.
    Whim – meaning capricious, or eccentric, not subjected to rational thought or intelligent thought.
    Similar to your posts.
    Therefore visa are issued in Thailand without any reliability or rational, which is normal in most of the world.
    
    Reply
    - Patrick Kelly
      
      Thursday, December 10, 2020 at 11:44 pm
      
      Be careful about stating facts here as the locals frequently get triggered. The paranoid attitude is extremely volatile. Writer beware.
      
      Reply
Jesus Monroe

Wednesday, December 9, 2020 at 3:01 pm

Eventually the government will get it……..3,4,5, years. Nothing like a bankrupt country to improve ones I.Q

Reply
- Patrick Kelly
  
  Friday, December 11, 2020 at 1:12 am
  
  Bingo! We have a winner. Truer words never spoken.
  
  Reply
Mike Frenchie

Wednesday, December 9, 2020 at 4:53 pm

No buyer… prices are diving fast – what was rented one year ago in Pattaya for 12.000 THB is now rented for 8.000 THB and going down!

Real estate is about 5% of the GDP is many major actors are going bust as we speak. Pattaya is now a ghost town full of unfinished buildings whose developers are bust. Same for Krabi, Phuket, Samui and soon Bangkok and Chian Mai.

Without reopening quickly (for people vaccinated), the government will have to rescue the tourism sector plus the real estate one… (25% of the GDP plus the shadow economy)

Trillion THB are on the line…

Reply
- Patrick Kelly
  
  Friday, December 11, 2020 at 1:10 am
  
  Government rescue for Tourism & Real Estate …Get set for the lockdown locals to be triggered !
  
  Reply
Marcle Merios

Wednesday, December 9, 2020 at 5:04 pm

I’m a property investor myself and I own 8 properties.
Only 1 in Thailand though.
I will not buy anything or make any more investments in Thailand until this government is out…
Most other investors are saying the same.
The corruption and nonsense around this government is the reason there will be no major investments in Thailand until the country and the people gets a DEMOCRACY !!!
Let the people of Thailand choose their over leaders and future

Reply
Ian

Wednesday, December 9, 2020 at 7:07 pm

This is what I’m doing I’m renting out my home and another property and gonna rent in Thailand my property goes up in price in england and the rent gets cheaper in Thailand a no brainer I did think of buying in Thailand but how this government treat thier own never mind farang means I’m a wherever I lay my hat that’s my home thailand farang lol

Reply
Mr cynic

Wednesday, December 9, 2020 at 10:52 pm

thought unless you are exceptionally wealthy,have a work permit and employ many thai nationals (in the hundreds minimum) it was not possible to buy free hold land/ property for non thais.
My understanding of the situation is that it is possible to purchase condos on a 99 year lease hold basis only.
If my understanding of the situation is correct I ask myself do you actually own that unit or are you just paying 99 years rent up front and infact own nothing?
I’m not a property expert or investor but that is how the situation appears to be to me.

Reply
- Issan John
  
  Tuesday, December 15, 2020 at 1:23 pm
  
  It’s not possible for non-Thais to buy land in Thailand, end of story.
  
  Condos, ‘yes’, up to 49% of any block, but land ‘no’.
  
  Reply
Preesy Chepuce

Saturday, December 12, 2020 at 9:18 pm

“Research Institute”, what a joke… you mean aggressive estate agent marketing and lobbying association. We know that estate agents depend on the myth of eternal price rises, and trying to convince people of “pent up demand” and “missing out” etc… but we also know that is all bs.

Reply

Maya Taylor

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