by wilbersuen | Sep 24, 2024 | News
Condominium transfers to buyers from Myanmar during the first half of 2024 exceeded the total transfers recorded in 2023, which had set a previous record.
According to the Real Estate Information Center (REIC), 638 condo units valued at 3.24 billion baht were transferred to Myanmar nationals across Thailand in the first half of 2024.
This surpasses the 564 units worth 3.7 billion baht transferred throughout 2023, marking the highest level of transactions to date.
The surge in condo transfers to Myanmar nationals began in 2022, with 349 units valued at 2.55 billion baht, a significant jump from just 30 units worth 274 million baht in 2021.
“For the first time in 2022, Myanmar nationals ranked among the top 10 foreign buyers receiving condo transfers, compared to only 20-50 units annually in previous years,” said Vichai Viratkapan, Acting Director-General of REIC.
In 2022, Myanmar nationals ranked sixth in terms of the number of condo transfers, following buyers from China, Russia, the U.S., the U.K., and France, respectively.
In terms of condo transfer value, Myanmar nationals ranked third, trailing only Chinese and Russian buyers.
In 2023, Myanmar buyers moved up to fourth place in the number of condo transfers, behind Chinese, Russian, and American nationals, while maintaining their third-place ranking in transaction value.
In the first half of 2024, Myanmar buyers rose to second place in both the number and value of condo transfers, surpassing Russian buyers who had held the second spot for several years, with Chinese nationals continuing to lead.
However, a significant decline was noted in the second quarter of 2024, following a crackdown by Myanmar’s government in April 2024 on Thai condo purchases by Myanmar nationals.
Condo transfers to Myanmar buyers dropped to 246 units valued at 1 billion baht in Q2, compared to 392 units worth 2.2 billion baht in Q1.
A property industry source cited not only stricter money transfer regulations in Myanmar but also more stringent measures by Thailand’s Lands Department, which has tightened foreign exchange transaction (FET) controls.
“If an FET is not clearly documented, the transaction will be frozen,” the source explained, adding that this policy impacts not only Myanmar buyers but also Chinese buyers.
Overall, the REIC reported that total condo transfers to foreign buyers in Thailand during Q2 2024 declined by 6.2% year-on-year, with 3,342 units transferred valued at 14.8 billion baht, a 17.7% drop.
As a result, the proportion of condo transfers to foreigners fell to 11.8% by unit volume and 21.1% by value, compared to 13.6% and 24.6%, respectively, during the same period last year.
Source: Bangkok Post
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The editorial team at Invest Bangkok Property
by wilbersuen | Sep 9, 2024 | News
Hotel operators are expressing concerns over proposed changes to foreign ownership rules in real estate, fearing it could result in a rise in illegal hotels in Thailand.
The government’s proposal includes extending the leasehold period for foreigners to 99 years and increasing the foreign ownership quota in condominiums from 49% to 75%.
These measures could negatively impact the competitiveness of Thai hotels by encouraging foreign buyers to exploit the tourism industry, according to Udom Srimahachota, vice-president of the Thai Hotels Association (THA).
Mr. Udom warned that with increased ownership, more foreign buyers might convert condo units into short-term rentals for tourists. Past incidents have shown agents from countries like China purchasing entire floors in condominiums and renting them exclusively to tourists from their home country in key tourism areas.
He highlighted that licensed Thai hotels face higher costs, including land and corporate taxes, while illegal accommodations operate without the same financial burden. Currently, there are around 16,000 licensed hotels in Thailand and approximately 15,000 unregistered ones.
In one instance, Russian agents bought out a condo project in Hua Hin, using the units solely for renting to Russian tourists, directly competing with licensed hotels, Mr. Udom added. He also raised concerns that with increasing flights from China to cities like Hua Hin, Chinese buyers may be drawn to invest in properties and illegally rent them to tourists.
He further questioned the proposal to lengthen leasehold terms for foreign land buyers, pointing out the existing trend of Chinese nominees developing housing, condo projects, and hotels. These investors often import both labor and construction materials from China, limiting the benefits to the local economy.
The THA has voiced these concerns to the Interior Ministry, calling on the government to focus on enhancing the competitiveness of Thai hotels. Mr. Udom also urged the administration to ease financial restrictions, allowing small and medium-sized hotel operators better access to loans for renovations. He emphasized the importance of regulating non-hotel properties rented out to tourists, ensuring they are properly registered within the system.
Source: Bangkok Post
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The editorial team at Invest Bangkok Property
by wilbersuen | Sep 4, 2024 | News
Higher debt leverage resulting from double financing is making it more difficult for property companies to secure bank loans, forcing some developers to rely on short-term loans from major shareholders.
Apinant Klewpatinond, chief executive of Kiatnakin Phatra Financial Group, a holding company of Kiatnakin Bank, said the bank continues to apply its existing loan assessment criteria for the property sector.
However, based on economic conditions and a higher debt-to-equity (D/E) ratio, credit risk in the sector has risen, making it challenging for some residential projects to obtain bank financing, he said.
During the recent era of low interest rates, many property companies increased their debt leverage through both bank loans and bond issuances. This double financing further elevated the D/E ratios of some companies.
According to Mr Apinant, the economic slowdown has presented significant challenges for several bond issuers. When approving new loans for the business sector, the bank also takes into account the potential for bond rollovers.
“For cyclical businesses, the bank will evaluate the broader business environment before approving new loans. Given the cyclical nature of the property sector, we are exercising caution in loan offerings amid the heightened risks in the mortgage market,” he said.
In response to these challenges, some residential developers are taking steps to conserve and raise cash.
These measures include avoiding new costs, borrowing short-term loans from major shareholders and selling assets to manage risks in a difficult financial market and limited mortgage loan approvals.
The property business constitutes a significant portion of KKP’s loan portfolio, accounting for 27.7 billion baht out of the bank’s total business loan outstanding of 60.1 billion baht as of June.
Additionally, KKP collaborates with the Bank of Thailand to support sustainable finance under the Financing the Transition programme, with a key focus on the property sector.
Separately, Amporn Supjindavong, UOB Thailand’s head of commercial banking, said the bank continues to offer financial facilities to property clients under a selective strategy.
For new residential investment projects, the bank primarily focuses on homes priced at a minimum of 5 million baht per unit, due to the lower risk associated with post-finance.
“Most large developers do not struggle with residential sales. Instead, they face challenges related to the increasing rejection rates of mortgage loans, stemming from homebuyers’ weakened debt repayment capabilities. As a result, the transfer of home ownership has become a more significant issue for developers than sales,” she said.
Ms Amporn said when approving loans for new residential projects, the bank considers several factors, including house prices, location, project sales and the financial status at both the project and company levels.
The D/E ratio and the company’s ability to manage bond rollovers are also key considerations.
The bank anticipates that mid-sized property companies, in particular, may resort to borrowing short-term loans from shareholders to support cash flow for investment projects. Large developers still report positive financial conditions, she said.
Source: Bangkok Post
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The editorial team at Invest Bangkok Property
by wilbersuen | Sep 3, 2024 | News
New condo launches in Greater Bangkok are anticipated to fall below expectations this year, largely due to sluggish demand amidst economic challenges, according to Colliers Thailand.
Phattarachai Taweewong, Director of Research at Colliers Thailand, explained that the Greater Bangkok condo market experienced a slowdown in the second quarter, driven by modest domestic economic growth and global economic headwinds.
“The Bangkok condo market overall has slowed, primarily due to a lack of strong demand drivers,” he said. “In the mid- to lower-end segments, buyers are facing high levels of household debt, rising interest rates, and a significant rate of mortgage rejections by banks.”
Colliers’ market data revealed that 5,386 new condo units across 15 projects, valued at a total of 35.6 billion baht, were launched in Greater Bangkok during the second quarter. Of these, approximately 1,000 units from four projects in inner-city, high-end segments achieved a sales rate of 65%, while units outside the city center had a sales rate of just 30%.
In the first half of 2024, 8,674 new condo units, with a total value of 49.3 billion baht, were launched in Greater Bangkok—almost a 50% drop compared to the 15,413 units launched during the same period last year. Despite this significant decline in unit numbers, sales value for the first half of 2024 slightly increased from 48.6 billion baht in 2023, due to a higher concentration of lower-priced units in last year’s launches.
Mr. Phattarachai projected that new condo launches in Greater Bangkok this year will not surpass 25,000 units, falling short of the initial forecast of 30,000-35,000 units made earlier in the year.
“Developers have found that sales in the second quarter were weaker than expected,” he said. “Despite property tax incentives, transfers of residential units are expected to decrease this year compared to last year, mainly due to the continued challenge of mortgage rejections by banks.”
The government has introduced incentives, such as reducing transfer and mortgage fees to 0.01%—down from 2% and 1%, respectively—for residential units priced under 7 million baht. These incentives are set to remain in place until the end of the year.
By the end of the first half of 2024, the inventory of unsold condos in Greater Bangkok stood at around 56,800 units. Given the current demand, it is estimated that it would take approximately 84 months to clear this inventory, compared to 60 months under more favorable economic conditions, Mr. Phattarachai added.
Source: Bangkok Post
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The editorial team at Invest Bangkok Property
by wilbersuen | Sep 2, 2024 | News
The vision of a continuous train journey from Bangkok to Beijing is closer to becoming a reality, thanks to the recent completion of a critical railway bridge over the Mekong River, connecting Thailand and Laos. This milestone significantly advances cross-border rail transport between the two countries, with only a few kilometers of track left to extend the route into China.
The newly operational Thai-Lao railway allows passengers to travel on a 12-hour journey from Bangkok’s Krung Thep Aphiwat Station to Khamsavath Station, just outside Vientiane, Laos. Khamsavath Station, situated approximately 9.6 kilometers from Vientiane, now serves as the final stop for this cross-border connection.
Final Stretch to China Despite the progress, a gap in the rail network still hinders a direct connection to China. Currently, passengers and cargo arriving in Vientiane must use taxis, vans, or other vehicles to cover the distance between Khamsavath Station and Vientiane Railway Station, which serves as the gateway to China. Officials remain optimistic that the remaining tracks will be completed by 2028, finalizing the direct rail link from Bangkok to Beijing.
Vientiane Railway Station, a modern facility built by China and located 16 kilometers northeast of the Lao capital, serves as the hub for high-speed trains connecting Laos to southern China. These sleek trains, part of China’s Belt and Road Initiative, have been in operation since 2021, linking Laos to major Chinese cities such as Kunming, Beijing, and Shanghai.
Boosting Trade and Tourism The Bangkok-Vientiane rail route is expected to greatly enhance trade between Thailand and Laos while also driving international tourism to Laos. As the once-isolated, single-party nation continues to welcome more foreign visitors, this rail connection is seen as a vital step in fostering greater cross-border exchange.
Ticket prices for the Bangkok-Vientiane journey are affordable, with third-class seats starting at $7.80, air-conditioned second-class seats at $16, and sleeper options available for $22 to $25.30.
Previously, trains from Bangkok only reached Nong Khai, with a highway crossing over the Friendship Bridge as the sole route into Laos. The recent extension of the rail line by approximately five miles into Laos, coupled with the construction of the new railway bridge, has now enabled direct rail travel between the two countries.
Collaboration between the State Railway of Thailand (SRT) and the Lao National Railway State Enterprise has ensured smooth operations, from scheduling and station management to ticket sales. As the train crosses the Mekong, Lao drivers take control, ensuring Thai drivers are not exposed to international liability when operating on Lao soil.
Gateway to China and Beyond For travelers seeking to continue their journey beyond Laos, the Chinese-built train service from Vientiane to Boten Station in southern Yunnan province provides a direct route into China. The service passes through key northern Lao cities, including Vang Vieng, Luang Prabang, Muang Xay, and Luang Namtha, before reaching the border. The Vientiane-Boten trains navigate through 75 tunnels, cutting across the rugged terrain and lush landscapes of northern Laos, an area still marked by unexploded ordnance from the Vietnam War.
Source: TravelDailyNews Asia-Pacific
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The editorial team at Invest Bangkok Property
