After the recent flooding, it is obvious that demand for condominiums has risen. With actual experience of having to move to live in a city condominium or apartment during the flood, many people have started thinking of buying one, either as a first home, a second home or for investment purposes. Among those who had never previously considered the condominium market, many questions are being asked.

Nowadays, there are thousands of condominiums to choose from, which could be either in completed buildings or off-plan (not yet completed). The advantage of buying in a completed building is that you will see the end product including the actual unit which you will get, the view, the lobby, the common areas, facilities and the overall atmosphere of the building. The disadvantage of buying in a completed building is that there are a limited number of units to choose from. Some developments have sold out but, today, in many new buildings there are still units left being sold by the developer or units being offered by existing purchasers. The latter are called re-sale units and can be purchased after the ownership is transferred to the existing purchaser or before transfer of ownership (known as “assignment of the contract” or which in Thailand is commonly known as “re-sell down payment”). Buying off-plan is the other option. The advantage with this is that you can have a wider choice of units and get the best possible prices when buying at the early stage of launching the project. The risk with buying off-plan is that you will not see the actual end product. Most projects will concentrate on building mock-up rooms for 1 – 2 unit types. The buyers should be aware of the pros and cons of both options. The guidelines for those who have just started looking at buying a condominium are:

Set the budget you want to spend. Do you need a mortgage or are you able to buy in cash? If you need a mortgage, you should calculate how much you can afford to pay in instalments every month and convert that back to the condominium price. Allow 10% – 30% of the price in cash as a down payment as necessary.

Choose the locations you would consider for your condominium and start researching properties available for sale. There are many channels you can access, the most popular being websites, newspapers, magazines and billboards. If you have limited time, you can contact a real estate agent, who will qualify your requirements and identify the buildings which best match them. Then they will take you to see each available option.

It is recommended that you should inspect at least 4 – 5 properties before making a decision. When buying in a completed building, check the defects in the actual unit and inspect the common areas, the condition of the car parking area, the common area maintenance fee and sinking fund, taxes, transfer fees and stamp duty, the mobile phone signal, internet connection and MATV (Master Antenna Television). Each building offers these amenities on a different basis. When buying off plan, it is recommended that you study the details of the floor plans, layouts and specifications provided in the units, and ask for a copy of the sale and purchase contract to read before paying the deposit. The contract should include all the details of the land title deeds, a description of the common area, specifications, facilities and amenities, the construction permit, floor plans and unit layouts. If the construction permit is not available, it should be noted that the deposit should be refunded if the project does not go ahead within a certain time period.

Pricing is one of the main concerns for many people who are wondering where we are on the property cycle. On average, the prices of Bangkok condominiums have increased slightly, by approximately 5.2 % y-o-y for completed buildings. However, the average asking prices of new launch projects have slightly decreased as the majority of new launches this year focus on the mid market rather than the luxury market. Only prime CBD locations and projects which are right next to mass transit stations have commanded higher increases. This year, many developers who have units left for sale after the building has been completed are offering the best promotions to clear their stock. Also, there are good offers from existing buyers who want to sell before ownership of their unit is transferred. Usually, during the holiday season, the downtown property market is quiet as most people have gone on holiday. This year, however, many people who have been affected by the floods are busy with renovating their houses. As such, it is probably likely to be the most active season yet and is a good time to buy a condominium given the variety of available stock and pricing.

The year 2011 has been one of the most fluctuating times for the residential property market, after the year started with slow movement and an influx of supply. Things improved with the hopes for the new government after the election. Then, the fourth quarter was marked by unexpected flooding with people busy looking after their properties. In 2012, the trend for the residential market will be for a focus on condominiums, while the housing market will need time to recover from the floods by way of new product designs, with buyers increasingly uncertain about location. Condominiums will be more popular among those seeking a city lifestyle. More people who had never lived in a condominium now have temporarily experienced living in condominiums in the downtown area during the floods. Although many were not used to being in a small space, we have found that many of these people like the convenience of a condominium lifestyle in terms of the downtown location, time savings and reduced hassle compared to a house.

Smaller Unit Sizes: The trend will be for smaller sized units. The size of the rooms will definitely be small at low-end to mid-range condominiums where the smallest one-bedroom unit will be around 25-30 square metres. In the high-end segment, rooms will also be less spacious than before but should be more efficiently laid out. For example, a popular size for one-bedroom units will be 45 – 55 sq.m., and 65 – 80 sq.m. for two-bedroom units, while a good three-bedroom unit can be 130 – 150 sq.m. rather than the existing 180 – 200 sq.m. The exception will be in the luxury and super luxury market where we have found that there is no definite answer concerning unit size and design.

Fully Furnished Units: Because more buyers today are end users than investors, they tend to choose condominiums that are ready to move in. From our experience in selling these condominiums, we have found that well-designed fully-furnished condominiums are more popular than those which are unfurnished. Previously, most developers offered only fully-fitted units as they believed that high-end purchasers would prefer to decorate the units to suit their tastes. Today, the market has changed. Those who have experienced the headache of furnishing a unit themselves know well that the results may not be as they had expected, and that the time and money invested may not match the outcome. To decorate a unit, you either have to hire a professional interior designer and contractors or you have to be prepared to “do-it-yourself” (DIY). Today, the conclusion is that fully-furnished units are the best option for a completed condominium project, provided that they are well designed and offer reasonably good quality for the price. However, for off-plan condominiums, a fully-furnished option will only be worthwhile if the buyers can see what it will look like.

Services to Occupiers: Another trend in living in a condominium will be the services provided by the management company. This can be a very controversial issue because the management company or the juristic person is supposed to look after only the common area. The common area fee is paid for the maintenance and management of the common area only. However, there is growing demand from condominium owners for repair and maintenance services, to sell and lease units, as well as offering housekeeping, valet parking and concierge services. Not all condominiums can afford to hire a branded hotel chain to manage this. However, the juristic person should be prepared to change the concept of the condominium and investigate how it will handle these requirements to benefit both the residents and the juristic person. This means ensuring that fees are charged to the residents for these additional services, with the money paid to the juristic person. In the meantime, there should be enough staff to handle the additional services to ensure the common areas are not ignored. If this is not done properly, one of the problems which arise in many condominiums is that the individual owners may ask for services from the staff and then pay the staff directly.

Detailed Designs: Trends in product design should definitely be influenced by the flooding. For example, basement car parking is to be avoided if not absolutely necessary. Machine and electrical rooms should be located above ground and electrical circuits should be designed with awareness of possible flooding at ground level. Flood barriers should also be considered, with a minimum number of entry points for water, to make it easier to control the entry of water into the building. Another controversial issue is the car parking area. In every building, little consideration has been given to the design of the car park because most developers have primarily been concerned about ensuring that the property complies with the regulations in terms of the number of cars rather than making sure that the parking area is really practical. Problems with the car park include insufficient parking spaces for the number of condominium units in buildings which have many small units. Other issues may be narrow access ramps and small parking spaces which cannot be realistically used. Issues which are particularly of relevance in high-end condominiums, where most buyers own expensive cars, include the provision of a car-wash area, drivers’ rooms and visitors’ parking. Other aspects include paying increased attention to detail to ensure realistic and practical designs, especially regarding the materials used which should be long lasting and easy to maintain rather than only looking good at the time of sale. In a more competitive market, all these points should form an integral part of the design plans and should be carefully considered as buyers are also likely to have more experience of living in a condominium.

Higher Prices: Bangkok condominiums have been undervalued for a couple of years compared with those in other key markets. With less new supply coming online in the Central Business District (CBD) and due to the new land costs and increased cost of construction, newly planned condominiums in 2012 especially in the high end segment and above will be more expensive. Pricing outside the CBD is more competitive and is likely to increase only in prime locations.

Hot Locations: The CBD and the areas surrounding mass-transit stations will continue to be in greatest demand. Other locations which will be popular will be an extension of the CBD which we call “midtown” and includes Rama IV, Ratchadapisek, Phra Kanong and Jatujak. These areas are just a short distance from the CBD and have supporting mass transit and retail facilities.

The launch of the iPhone, iPad and iPod application which is available for free download from the Apple’s App Store marks a milestone for CBRE Thailand’s online marketing initiative. In recognising the growing importance of online media for property sales and marketing combined with lifestyle changes, CBRE’s mobile application aims to keep those who are on the move updated about the latest property listings and investment opportunities in the residential market.

The key features of the application is the property search function with a map or listing view, property image gallery and a favourite function to bookmark properties. Property search can be narrowed down by type, location and number of bedrooms and the application has access to CBRE website’s entire property database. The latest hot deal properties are also updated live.

A unique aspect is the ‘Near Me’ function which allows users to see available properties close to their current location using GPS technology.

The application is built on the platform of CBRE Thailand’s award winning website where all updates on the application are real time and synchronised with the web which currently feature over 1,200 quality residential stock which are regularly updated as well as hot deals properties which offer competitive prices in sought after locations and rare investment opportunities.

“The launch of the mobile application is a big step forward for CBRE Thailand’s online marketing. The application has been specifically designed to serve people on the go and ease of use has been a key design consideration. Property buyers can search and view a range of residential properties in Thailand anytime, anywhere,” said Ms. Raviwan Siriwattanothai, Web Manager, CBRE Thailand.

Along with the launch of the application, the CBRE website has also undergone a facelift with additional features such as a quick search function, search tips and customised property alerts. CBRE also launched ‘The Luxury Collection’ which features premium properties priced over THB 40 million. In 2011, CBRE Thailand was awarded the Best Residential Real Estate Agency Website Asia Pacific at the Asia Pacific Property Awards in association with Bloomberg.

In addition to the website, CBRE has further developed social media marketing using Facebook www.facebook.com/CBRE.Thailand, Twitter @CBREThailand, YouTube www.youtube.com/CBREThailand and the CBRE Blog www.thailandpropertynews.com as part of our cohesive online marketing strategy. CBRE Thailand’s YouTube page provides short and to the point market updates from key professional specialists in the industry. The Thailand Property News Blog provides current updates of the latest industry news, CBRE market research and VDO interviews and is also a forum to exchange viewpoints. CBRE Twitter provides instant updates on new listings and hot deal properties and news and related events.

CBRE has been committed to continuously developing our online marketing channels and an effective website is recognised as one of the most important elements of a property agent’s marketing kit.  In 2010, CBRE generated transactions with a combined value in excess of THB 1,250 million where the enquiry was generated online.

The CBRE Thailand Application can be downloaded now for free from the Apple’s App Store. The android version of the mobile application will soon be released in the next few weeks.

CB Richard Ellis and Major Development PLC. cordially invite you to join Major Development 11th Anniversary Celebration.

Date: Saturday 20th - Sunday 28th August 2011
Venue: Hall of Fame, M floor, Siam Paragon

At this event, you can benefit from special privileges for units at CONDOMINIUMS READY TO MOVE IN!!

Additional promotions are available exclusively for Marrakesh Hua Hin Residences, Wind Sukhumvit 23, Wind Ratchayothin, Watermark Chaophraya River, Royce Private Residences, Collezio Sathorn-Pipat and Equinox Phahol-Vibha.

E-mail or call 02-259-2929 for more information.

Emporium Lifestyle Home & Residences

Date: 25 August – 4 September 2011
Venue: Fashion Hall, 1st Floor, The Emporium Shopping Complex

Best offers available for Bangkok and Pattaya new condomium projects

 Cetus Beach Front Pattaya

Pearl Residences Sukhumvit 24

Bright Sukhumvit 24

The Breeze 

For more information, please contact us
 

The reason for these successful leasing campaigns was a combination of the location, size, unit type, design and interior decoration of the two projects as well as a preference among some expatriate tenants for single ownership apartment buildings rather than individually owned condominiums.

Capital Residence is located on the main road of Sukhumvit Soi Thonglor. The building has 74 one to four bedroom apartments ranging from 58 sq.m. to 320 sq.m, with the majority of the units being 160 sq.m. three-bedroom units. The building was completed in October 2010 and was 95% leased within three months of completion.

S59 located on Sukhumvit Soi 59 comprises sixteen, 240 sq.m., three-bedroom units. The building was completed in December 2010 and is now 100% leased.

CBRE is the sole leasing agent for both buildings and also the project manager responsible for the construction supervision of Capital Residence.

There are a number of reasons for tenants favouring apartments. In an apartment building if there is a problem with the unit, the building manager is on hand to resolve this. In a condominium building the property manager is responsible only for the management of the common areas and not the individual units. Condominium building managers have no responsibility for repairs or maintenance inside individual condominium units.

Mr. Theerathorn Prapunpong, Director of Residential Leasing Services at CBRE said, “The locations of the two developments were an important factor behind their success, but location alone is not enough. The unit types and sizes matched market requirements as did the fixtures, fittings, furniture and appliances. It was the combination of both location and design that enabled both projects to succeed in a competitive market.”

In order to succeed, apartment developers need to clearly identify the needs of tenants in terms of unit type and size and examine the competition for each size of unit. The developer must optimize the size of each unit type creating the most efficient unit that satisfies tenants’ space requirements in order to maximise rental returns and the per sq.m. rent.

Getting the combination of location, size and design to maximize returns is complicated and need a depth of market exposure and experience, which is why CBRE now provides a design development consultancy service for developers, analysing and interpreting real market information from over 300 expatriate residential leasing transactions that company concludes each year.

For more info. on Bangkok condo for lease.

The effect of the global crisis on Asian economies has worn out; most economies in the region are back on track and key Asian cities are drawing back foreign investors to its property markets. However, with Thailand’s political instability in the past two years, the country has yet to regain its appeal to foreign investors despite the fact that it is probably one of the most affordable places for property investment.

Another factor why foreign investors have yet to return is the strength of the Baht against the dollar, but we do not see this as being a major deterrent as Thai properties are still undervalued with room for further capital appreciation.

In the last two years, demand for downtown condominiums was dominated by locals, and concentrated in one-bedroom units. The absorption rate for THB 10 to 20 million high-end condominiums which were in demand during the boom cycle from 2004 to 2008 is now very slow. One key factor that will drive demand for high-end condominiums will be the return of foreign purchasers. Pre-global crisis, foreigners accounted for up to 35% of demand for Bangkok CBD condominiums, but this reduced to 18% post-crisis, with the majority being expatriates living in Thailand or frequent travellers to the country, but a limited number of foreigners from overseas markets.

The result of the election shows a clear mandate for Puea Thai to form the new government, which will hopefully bring about political stability, a key factor in regaining investor confidence. In essence, the Thai market is moving towards the right fundamentals to attract back foreign investors, but if we leave the market to take its’ natural course, this may well take a long time. With the new government to be formed, the real estate sector is one area we wish to see more public sector involvement in.

We believe to effectively draw up policies to stimulate foreign demand, there needs to be two sets of policies – one focusing on the short-term to kick-start the market, and the other focusing on sustainable long-term growth.

A short-term stimulus policy should allow special purchasing privileges, but implemented for a limited timeframe. For example, following the Asian crisis, the Condominium Act was amended in 1999 to allow freehold foreign ownership of up to 100% of the condominium floor area in Bangkok and Pattaya for a 5-year period with conditions such as the total land area where the condominium is located shall not exceed five rai and the project shall not comprise less than forty units.

The policy proved to be effective in boosting foreign demand for condominiums in the short-term and we urge the incoming government to re-visit this policy, but with modifications to apply to current market conditions and looking at a 2-year timeframe rather than the original 5-year. The policy should be implemented in specific areas including Bangkok and key resort markets such as Phuket and Pattaya where demand is largely foreign. The policy should also be extended to both completed and off-plan condominiums that are due for completion within 2 years from now to help clear unsold inventory.

The stimulus policy should be implemented hand in hand with long-term policies which aim to sustain the growth momentum, as investors are looking at markets which provide gains from higher capital values as well as a stable return from rental yields. Many sensible long-term policies have been previously raised by the private sector but have not been considered seriously by past governments, including allowing local banks to offer foreigners mortgage facilities, an extension of the lease term to 99 years to stimulate demand for landed properties, particularly luxury resort villas and to stimulate demand for regional offices.

The new government is tasked with many priorities to tackle and problems to resolve, and we do hope that an effective cabinet will be installed that will do the country, its economy and its people good. The opportunity is in Yingluck‘s hand to make independent decisions and changes that will help move the country forward.

Find more info. on Bangkok Property Purchase Guidelines or contact us for property advice.

In every established property market, the super prime properties are a segment on their own. Super prime properties do not follow the mass market, neither do the super rich buyers whose criterion and judgement are far removed from the general market trends. London, for example, clearly reflects this. While the majority of the UK market has not recovered back to its peak, the super prime market has continued with its own momentum and doesn’t track the general overall market. Transactions and prices are driven by strong demand from international investors from Russia, China, India and the Middle East for a limited and specific super prime stock. London has traditionally been the most sought after global property market and one which has proved to be a good long-term investment. London offers super prime projects such as One Hyde Park which in itself attracts affluent international investors.

While elements of the Bangkok market are experiencing a glut of supply and their prices are flat, Bangkok lacks variety in the super prime market. My definition of super prime properties is those priced over THB 200,000 per sq.m. with an outstanding location, quality and facilities. In late 2007, The Sukhothai Residences was the first super prime property to sell off-plan and attracted both elite Thai and foreign buyers. After the global crisis, the market for luxury properties declined globally, but demand is now rebounding. In Bangkok, we have recently seen a few more super prime projects being launched off-plan including The Ritz Carlton Residences and the St. Regis Residences which is completed.

Many people tend to raise the question why these properties command a price premium over and above the market average of THB 125,000 to 150,000 per sq.m. for other high-end condominium projects, and how strong the demand is for super prime properties in Bangkok. My answer is yes, demand is strong, but only if the projects tick all the right boxes which is expected from a super prime project by international standards.

Location is undoubtedly the most important factor. From an international perspective, Bangkok is a popular tourist destination and a regional hub in Southeast Asia. Location wise, the prestige addresses in the CBD which are well connected with an upmarket surrounding are the most desirable. The areas which can compare to Manhattan in New York and Knightsbridge in London will be the areas commanding the premium. One key criteria for location includes uninterrupted spectacular views such as Lumpini Park or the skyline which can add value and premiums. However, it is important to ensure that if all units do not face the main views or are on low floors, they are offered alternative views such as pool or landscaped gardens.

Iconic designs and celebrity architects often go hand in hand with super prime properties. While it is difficult to attribute the percentage of premium generated by a celebrity architect, they often add intrinsic value to the project in addition to design values. The quality of design and functionality is ensured and in many instances the projects become a landmark itself. For example, Mahanakorn where the Ritz Carlton Residences is located boasts a cutting-edge building design by OIe Scheeren. Interior design, whilst subjective in its appeal, must also be the right style and reflects the project’s character and express the feel of luxury through the design, use of quality materials and workmanship.

Along with the design, quality specifications are mandatory for super prime projects and an aspect which developers cannot compromise on. Buyers of super prime properties will expect a level of quality and the latest technology to be incorporated. The use of premium brands for sanitary ware, kitchen cabinets and fittings, appliances and branded furniture, for example, will convey a sense of quality.

Branding is another aspect which is closely associated with super prime projects, from the use of five-star hotel operators, the architect which sometimes is a brand itself, or a developer such as Aman which is an internationally known developer and hotel chain. In Bangkok, most super prime projects to date are associated with five-star hotel chains- The Sukhothai, Ritz Carlton and St.Regis. The use of a brand guarantees a level of service and property management which ensures the property upkeep and value appreciation.

The project scale also directly impacts exclusivity. Most successful super prime projects globally feature under a 100 units. Low density and exclusivity are mandatory for the super rich market. However, the number of units will also depend on factors such as pricing, market conditions, planning regulations and financial feasibility.

Lastly, the services and amenities offered by the development must also exceed the basic amenities offered in other projects. Facilities such as a sizable pool and gym, steam and sauna rooms are expected, but to achieve the premium, super prime projects must offer the additional extras such as a spa, private lounge and concierge services.

All the above factors are achievable, but Thailand needs to work on construction standards and workmanship as many luxury projects today still suffer from defects and delivering flawless quality is essential for super prime properties. Buyers for super prime properties are driven by preference in choice rather than price and if all the key criteria have been met, I believe there is room for more super prime properties in Bangkok. The challenge in selling super prime off-plan is in conveying the level of luxury and quality as attributes such project facilities, services and the overall atmosphere are not tangible until project completion.

•  A new freehold condominium project on Sukhumvit 24
• Just 3 minutes walk to The Emporium and 5 minutes to Prompong BTS Station
• Highly exclusive with only 78 units; ideal for both investment and own living
• Most prime location with a range of superb public amenities within walking distance
• The building design is inspired by a modern English contemporary architecture with high quality finishes
• Each unit is designed for a highly efficient and functional use of space

Contact us now for more details and for exclusive pre-sales price on Pearl Residences, Bangkok condominium sales

The cabinet on Tuesday approved a proposal that the Government Housing Bank (GHB) make available 25 billion baht for loans for first-time homebuyers.

The bank will offer first-time homebuyers a mortgage loan at zero interest for the first two years if it is less than three million baht, with a full term of 30 years. Homebuyers with less than one million baht annual income can borrow up to one million baht.

The projected is aim at helping low and medium income earners at a time when interests rates are rising and the cost of living increasing. The government will compensate the bank for the interest loss, at 450-500 million baht.

Borrowers will pay zero interest in the first two years, 0.5% in years 3 to 5, and 1% from year 6 onwards.

Homebuyers can submit loan applications from May 8 to Dec 31.

Deputy government spokesman Vachara Kannikar said the cabinet approved 25 billion baht, up from the bank’s previous proposal of 20 billion baht.

The scheme applies to people buying a stand-alone house, a townhouse or condominium. To prevent for any impact on other banks, the cabinet has banned existing homebuyers from refinancing existing loans through the scheme.

The government expected homebuyers’ loan applications to meet the 25 billion baht within two weeks. GHB expects the mortgage scheme will stimulate the real estate sector and encourage stable growth.

 The cabinet also approved additional measures to help entrepreneurs access loans from the Small and Medium Enterprises Development Bank. This is aimed at businesses affected by the political unrest who have yet to receive insurance payments.
They can seek loans up to 15 million baht before June 30, up from the 5 million baht loan offered up until Dec 31 last year.

The cabinet also approved a 5.5 million baht budget to compensate BTS, the operator of the elevated skytrain train, for losses during the political unrest last year. The Transport Ministry is required to negotiate a compensation settlement with BTS, which is seeking recompense for lost income.

The company reported that it lost 140 million baht when part of the skytrain service was shut down for 20 days in April-May last year. The cabinet approved a 212.65 million baht budget from a reserve emergencies fund to compensate government agencies for damages.

The 1991 Condominium Act is counterproductive to the wants and needs of the Thai property market.

With economies and property markets booming across Asia, many question why foreign demand for Thai properties has yet to return. During the pre-crisis period before 2008, foreign purchasers accounted for up to 35%of the demand for condominiums in Bangkok’s central business district. That figure included foreign purchasers from overseas, foreigners working in Thailand ad permanent residents.

Today, foreign demand is below 20%. The obvious reasons for this include the weak recovery of the US and European economies, the strength of the Thai baht and a negative foreign view of Thai politics. Another factor that has always limited interest in the Thai condominium market is the lack of mortgage facilities from local banks for foreign purchasers.

The lack of mortgage facilities is shutting the door on demand from a large regional market of buyers who would have considered purchasing condominiums in Thailand for investment or as second homes, but who are unable to put 100% of a unit’s asking price down. Even cash-rich investors often utilise mortgage facilities to leverage their investments.

It would be incorrect to say that local mortgage facilities are completely unavailable for foreign purchasers, but to truly understand this issue one needs to understand the complexities of the Thai property and banking laws and how the two are intertwined.

Under the 1991 Condominium Act, foreigners are allowed to purchase freehold condominium units at up to 49% of the total saleable area of a building, but as non- residents they must transfer the funds to pay for the property from overseas. In order to transfer ownership of property at the Lands Department, a non-resident is required to provide a Foreign Exchange Transaction Form,a document certifying the transfer of funds from overseas in a foreign currency for the purpose of purchasing the property.

This law makes it impossible for foreigners to obtain the Foreign Exchange Transaction Form using mortgage facilities from local banks as those funds would be released in Thai baht and banks would therefore be unable to provide the document that is required to complete the transaction. The document can only be issued if Thai banks issue the funds through their overseas branches, which some Thai banks have done in the past, but don’t any more.

For this reason, mortgage facilities are unavailable to foreign purchasers, unless they are permanent residents of Thailand an able to borrow locally. In this case, they are not required to submit the Foreign Exchange Transaction Form on transfer of ownership.

Even for expatriates being paid in Thai baht, the process is also complex. They are entitled to borrow locally in Thai baht providing they have a work permit, an ongoing employment contract and have been living and working in Thailand between three and five years. However, only 40-50% of their salary deposited into a non-resident account can be contributed to the property purchase;the remaining funds still must be from overseas. So in effect, they are allowed to borrow,but the law prohibits them from transferring ownership of the property unless part of the funding is transferred from overseas.

In today’s market, this law implemented 20 years ago is obsolete. It is inconsistent and counterproductive to the wants and needs of the local property market because it blocks out foreign demand for Thai properties. A more flexible law should be enacted to open up opportunities for foreign investment, one which eliminates the requirement of overseas funding or allows local borrowing by foreigners for up to 50% of the property value.

One of the reasons there is substantial demand to invest in markets such as Hong Kong, Singapore and other financial centres is the availability of mortgage facilities for foreign investors. Allowing foreigners to purchase without a requirement to transfer funds from overseas will not only increase demand for Thai properties but also allow local banks to lend to foreign purchasers and stimulate the local banking industry. Each bank must of course perform thorough credit checks and have stringent lending requirements.

At present three foreign banks with local branches offer foreign purchasers mortgage facilities – Standard Chartered, UOB and HSBC – whereby the funds are released from their overseas branches in foreign currencies and a Foreign Exchange Transaction Form is issued to the purchaser.

However, the mortgage facilities offered by these banks also have limitations. For example, the UOB mortgage is available only Malaysian and Singaporean nationals, and for HSBC and Standard Chartered, the borrower must be an existing private banking customer with a savings deposit in an overseas or local branch of the bank.

Thailand has a large reserve of potential foreign purchasers and the property market certainly has significant potential to grow both in terms of demand ad prices. However,this will happen only if obsolete laws are done away with and investor-friendly laws and bank policies that facilitate market demand are appropriately implemented.

“One of the reasons there is substantial demand to invest in markets such as Hong Kong, Singapore and other financial centres is the availability of mortgage facilities for foreign investors.”

Click to view more info. on Q Langsuan Bangkok condo sales or contact us.