According to real estate appraisal and consultancy agencies, the growth in Thailand’s property market during the second half of this year will be driven by foreign buyers, while domestic buyers have not fully regained their purchasing power due to unfavorable factors. The country’s economy has shown signs of improvement, thanks to foreign purchasing power, especially since the reopening of China and the resurgence of the tourism sector and selected businesses. The Ministry of Finance’s Fiscal Policy Office predicts that Thailand will welcome 29.5 million tourists in 2023, generating 1.3 trillion baht in revenue. However, growth in the property sector is hindered by rising interest rates, inflation, and political uncertainties.
According to the Real Estate Information Center (REIC) of the Government Housing Bank, the number of condominium transfers by foreigners across the country increased by 79.2% to 3,775 units, and the value of these transfers rose by 67.6% in the first quarter of 2023 compared to the same period last year. Total transfers at the end of the first quarter amounted to 17.1 billion baht. This indicates a positive recovery trend in the real estate market following the reopening of the country, allowing foreigners to travel and engage in property transactions and transfers as before.
Artitaya Kasemlawan, head of resident sales for real estate service and investment firm CBRE (Thailand), stated that 89% of customers from last year until the beginning of this year were Thai, while the remaining 11% were foreigners, mostly from China, Hong Kong, Taiwan, Myanmar, Singapore, and Japan. The agency has observed a healthy growth in foreign buyers since the beginning of this year.
She further mentioned that foreign buyers in the condominium sector typically have higher budgets compared to Thai buyers, ranging from 15 to 30 million baht per unit. In Bangkok, they prefer to reside in main business districts such as Sathorn, Lumpini, and Sukhumvit, as well as along the banks of the Chao Phraya River.
Sopon Pornchockchai, president of the Agency for Real Estate Affairs (AREA), predicts that foreign buyers will account for 15% of the total property value or approximately 10% of total units transferred, and these numbers will increase to about 18% of total units sold in the next two years.
AREA forecasts that 111,273 property units will enter the market this year, representing a 5.3% increase compared to last year. The value of property units in 2023 will amount to 478.61 billion baht, a 6% increase from 2022.
Sopon also highlighted that only 60% of total purchases are for actual residential purposes, while 22% are speculative investments by Thai investors, and the remaining 18% are purchases made by foreigners for both residential and investment purposes.
He cautioned that if speculative investments continue to rise and the proportion of genuine buyers decreases, it may eventually lead to market problems and a decline in property prices.
Yes, foreigners are allowed to buy property in Thailand, but there are restrictions on the type of property and ownership. Foreigners are generally not allowed to own land, but they can own condominiums if the gross floor area of the condominium building is more than 51% owned by Thais (i.e. the maximum foreign ownership is 49%). Foreigners are generally not allowed to own landed properties in Thailand. Foreign ownership of landed properties, including houses and villas, is restricted by the Thai Land Code. However, foreigners can lease land for a long-term period of up to 30 years, with the option to renew.
It is important to note that these rules and regulations can change, so it’s advisable to seek legal advice before buying property in Thailand.
As a foreigner, it is possible to obtain a clean title to a property in Thailand, but it is important to exercise caution and thoroughly research the property and the seller before making a purchase.
A clean title refers to a property ownership certificate that is free of any encumbrances or legal disputes. When buying a property in Thailand, it is important to conduct a title search and ensure that the property is registered and has a clear ownership history.
However, even with a clean title, there have been instances of fraudulent property sales, so it is important to seek the advice of a qualified real estate lawyer and conduct due diligence before making a purchase. This can include checking the authenticity of the ownership papers, verifying the identity of the seller, and checking for any outstanding debts or legal disputes related to the property.
In summary, it is possible for a foreigner to obtain a clean title to a property in Thailand, but it is advisable to take all necessary precautions to protect your investment.
The Thai government has lifted its mask-wearing mandate with immediate effect. This is in line with the improving Covid-19 situation in the country as the country moves towards living with the virus.
On Thursday 23rd June 2022, it was announced in the Royal Gazette that the wearing of masks would be voluntary. This applies to both indoor and outdoor spaces. However, the Thai Public Health Ministry still advised people to wear masks in crowded places or areas where social distancing is not possible and when ventilation is poor. For those who are at high risk of severe Covid-19 symptoms or death, they are still advised to keep wearing masks properly whenever there are other people around.
The number of condominium transfers made by foreigners in the first quarter of 2022 continued to fall. The main reason for this is the draconian measures put in place by China to control the movement of its people because of its zero covid policy. In Q1 2022, the number of transfers attributed to the Chinese was 949 units. This is a 38.1 per cent drop compared to Q1 2021 when 1,532 units were transferred to Chinese buyers. Considering the Chinese made up the bulk of the transfers, approximately 45 per cent of all transfers, this is a rather significant statistic.
It is vital to note that the reason for the lower number of condominium transfers is that China restricting the movement of its citizens as it continues to be isolated from the rest of the world due to its zero covid strategy. Hence, it would be likely to be the case that when the Chinese government relaxes its zero-covid stance if it ever does, or when covid-19 is kept under control in China, the number of transfers attributed to Chinese buyers is likely to go up.
Coincidentally, the number of condominium units transferred to Russians shot up by 100 per cent when compared to Q1 2021. This is perhaps reflective of the ever-increasing number of Russians considering life abroad as their country is growing ever more isolated from the rest of the world due to the war in Ukraine.
Overall, the number of transfers that were made to 8 out of the top 10 nationalities receiving condominium transfers rose.
Top 10 nationalities receiving condo transfers nationwide (by unit)
Looking at the numbers, if the Chinese were to maintain their rate of condominium transfers in Q1 2021, the number of units transferred in Q1 2022 by foreigners would be higher when compared to the number of units transferred in Q1 2021.
Globally, there is a flight to assets and one of these assets is property. The reason for this is that property is still seen as a good hedge against inflation. As inflation is stubbornly high just about in every corner of the world, property buyers are hedging against inflation by placing their monies in assets like property. So long as inflation remains stubbornly high, property buyers across the globe will continue to look to property as a “flight to safety”.
These videos were taken by the team at Bkk Gongyu Co., Ltd in February 2022. Shawn visited the show flat and here is a brief presentation of each of the unit types. If you would like to visit the show flat, do contact Shawn at +66 63 446 0301.
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