by Daryl Lum | Jun 6, 2024 | Bangkok Property Market Updates, Expat Living & Relocation
According to a statement from the Thai government, while Cambodia and Laos have joined the list of countries eligible for a 60-day visa-free stay, Myanmar has not been included. Previously, Myanmar, along with Cambodia and Laos, received only 14-day visas.
Myanmar is not among the 93 countries on Thailand’s newly extended visa-free list, which will take effect on June 1, sources reported.
In an effort to boost tourism, the Thai government has extended the list of 60-day visa-exemption countries, effective June 1. Previously, nationals from certain countries could stay in Thailand for 60 days without a visa. Now, six more countries have been added to this list: China, Laos, Mongolia, Russia, Cambodia, and Macau.
As a result, Myanmar citizens will continue to be limited to a 14-day stay without a visa.
Additionally, a new type of Destination Thailand Visa has been introduced, allowing individuals involved in business, Thai culinary education, art, and traditional Muay Thai boxing to stay for 180 days under the new visa policy.
Currently, more Myanmar nationals are purchasing condos and conducting business in Thailand than in previous years. In the first quarter of this year, Myanmar surpassed Russia to become the second-highest country in terms of condo purchases in Thailand.
by Daryl Lum | Jun 5, 2024 | Bangkok Property Market Updates
Noble Development, a company listed on the SET, is shifting its focus to foreign buyers for new condominium projects in Bangkok due to weak domestic demand.
Sira Udol, the Chief Operating Officer for residential real estate at Noble, noted that the Bangkok condo market was unfavorable in the first quarter of this year, impacting the company’s presales.
“The sluggish Thai economy has weakened local demand,” he stated. “To mitigate the impact on our sales, we are strategically targeting the overseas market during economic fluctuations.”
Adopting a one-price policy, which offers the same prices to both Thai and foreign buyers, has resulted in increased sales to foreign buyers each year since the company began targeting them in 2019, according to Mr. Sira.
In 2020, foreign buyers purchased 265 units worth 1.75 billion baht, followed by 432 units worth 2.3 billion in 2021, 607 units worth 2.82 billion in 2022, and 686 units worth 5.24 billion in 2023.
Despite a 16% year-on-year drop in total presales in the first quarter of this year to 3.36 billion baht, sales to foreign buyers reached 2.2 billion baht, accounting for 66% of total sales for the quarter. This figure is nearly half of the total sales to foreign buyers for all of 2023, Mr. Sira reported.
Approximately 80% of this total came from a new project, The Embassy Wireless, which launched internationally in the first quarter before being introduced to the Thai market. Most foreign buyers were from Singapore, Taiwan, Hong Kong, China, and Myanmar, said Mr. Sira.
“While the number of Chinese buyers has decreased since 2022 due to economic struggles, the emerging market in Myanmar has compensated for this decline, outperforming both China and Taiwan in the first quarter of this year,” he explained.
This project is a joint venture between Noble and the Hong Kong-based investment group Hongkong Land. It is located on a 3.33-rai plot on Wireless Road and comprises 757 units valued at 10.9 billion baht, with unit prices starting at 18 million baht.
Noble aims to achieve 6 billion baht in presales from foreign buyers by the end of this year, with the launch of a new high-value condo project in the third quarter, Mr. Sira announced.
The Nue Prime Asok-Rama 9 project, valued at 13.8 billion baht, is situated at the Rama IX-Din Daeng junction.
“We expect this project to attract international buyers due to its favourable location,” he said. “We continue to conduct a series of online and offline activities in key markets, particularly Taiwan and Myanmar, to expand beyond traditional sales channels and capture new customers.”
by Daryl Lum | 28 May 2024 | Bangkok Property Market Updates, Infrastructure & Urban Development
The high-speed rail project connecting Don Mueang, Suvarnabhumi, and U-Tapao airports is slated to commence operations later this year, following a revised agreement between the government and the project developers.
Anan Phonimdang, Deputy Governor of the State Railway of Thailand (SRT), confirmed that the revised agreement has been approved by the SRT board.
The agreement will be forwarded to the Eastern Economic Corridor (EEC) Policy Committee and the cabinet for further review to ensure the state’s interests are protected. The Notice to Proceed (NTP) is expected to be issued by the end of this year.
Asia Era One, a consortium led by CP Group, won the 224.5 billion baht contract to build the rail system in 2018. However, the project faced delays due to various issues, including the pandemic’s impact.
The SRT and the Office of the EEC have renegotiated parts of the contract with the consortium to ensure project completion.
“The resolution is clear and based on established principles. The company must provide an additional bank guarantee to assure project completion,” said Mr. Anan.
The revised contract addresses four key issues: payment of the joint venture rights, government investment in the project, an additional bank guarantee, and investment promotion privileges.
Under the new terms, Asia Era One will pay the joint venture rights in full, plus interest, totaling 11.7 billion baht, in seven installments.
The government will begin investing in the project 18 months after the NTP is issued, rather than immediately after the trains start operating. The company is required to provide an additional bank guarantee of 111.9 billion baht within 270 days of the contract revision.
Under the original public-private partnership agreement, the government committed to investing 111.9 billion baht in the project, including 3.57 billion baht for land appropriation. The remaining 108.33 billion baht would be paid starting in the sixth year after train operations commence.
Asia Era One has requested the government to compensate for ongoing construction work.
For the NTP to be issued, the company must first receive an investment promotion certificate from the Board of Investment. However, this requirement has been waived following the review process that concluded on May 22, said Mr. Anan.
If the NTP is issued as planned, the construction is expected to be completed by 2029.
by Daryl Lum | 27 May 2024 | Bangkok Property Market Updates, Investment Analysis
In the first quarter of 2024, foreign buyers took the lead in the condominium market, with new projects primarily targeting major tourist destinations, resulting in a total investment of over 56.6 billion baht.
Phattarachai Taweewong, Director of the Research Department at property consultancy Colliers Thailand, noted this quarter as the first instance where more condo projects were launched in key tourist areas than in Bangkok.
“We have never seen such a large volume of new condo supply outside Bangkok before,” he commented. “The primary driver of this trend was the demand from foreign buyers, especially from China and Russia.”
Pattaya topped the list with 4,493 new units valued at 16 billion baht, a significant increase from the previous year’s 3,302 units—a 132% rise from 2022.
These launches were predominantly from large-scale projects by publicly listed developers such as AssetWise and Origin Property.
Colliers anticipates that the remaining quarters of 2024 will see new condo launches mainly from local developers.
“The substantial volume in the first quarter was driven by strong demand, both for personal use and investment,” Phattarachai explained. “Some Chinese and Russian investors even purchased entire blocks of new projects to lease them to their compatriots.”
By the end of 2024, Colliers expects new condo launches in Pattaya to reach 7,000 units.
However, Phattarachai cautioned that a sustainable market volume should be between 3,000 and 5,000 units annually. “Exceeding this range could lead to an oversupply, similar to the 2013-14 period when over 10,000 units were launched annually, resulting in years to absorb the excess.”
The oversupply from that period had significant repercussions, with 27 projects, comprising about 9,000 units, halting sales activities until now. Colliers is monitoring whether these projects will return to the market.
Following Pattaya, Phuket saw the second highest number of new condo units, with 3,338 units from 12 projects valued at 25 billion baht.
This follows a record high of 8,743 units launched last year, a more than sixfold increase from 1,419 units in 2022, and surpassing the previous peak of 6,429 units in 2012.
Phuket is projected to launch 8,500 new condo units by the end of 2024.
“Before the pandemic, condos priced at 120,000 baht or more per square meter were rare in Phuket. Now, prices typically range between 150,000-180,000 baht per square meter,” Phattarachai observed.
In Bangkok, 3,288 new condos were launched in the first quarter of 2024, a 33% decrease from the same period last year, marking the lowest figure in 15 years.
“The Bangkok condo market has slowed since the third quarter of 2023, with developers adopting a conservative approach,” said Supasit Vitooraporn, a property analyst at Colliers’ advisory services department.
Supasit highlighted that a key issue is the high mortgage rejection rate, particularly in the lower-priced segments of 3 million baht or less, which saw a 70% rejection rate.
by Daryl Lum | 21 May 2024 | Bangkok Property Market Updates, Developer Watch, Investment Analysis
Frasers Property Home (Thailand), a leading residential developer, plans to launch three new condominium projects annually, each valued at over 1 billion baht, to diversify its portfolio and cover all market segments.
Apichart Hengwanich, Senior Executive Vice-President of Condominium Project Development and Operations Support, noted that Frasers Property Thailand Plc, the parent company, was previously the only top 10 developer in Thailand without condominiums in its portfolio.
“The Bangkok condo market experienced a slowdown during the pandemic but rebounded swiftly last year due to a lack of new supply in recent years,” Hengwanich explained. “This makes it an opportune time for us to launch our first condo project this year.”
Several factors are driving increased condo demand, including the government’s budget to boost purchasing power, a downward trend in interest rates, and the potential removal of certain individuals from the National Credit Bureau’s blacklist.
“Many individuals blacklisted by the National Credit Bureau have minor issues,” Hengwanich said. “Removing them from the blacklist would significantly increase the number of potential homebuyers, particularly for condominiums.”
On May 25, Frasers Property Home will begin bookings for Klos Ratchada 7, a low-rise condo project valued at 426 million baht. This marks the company’s first condo project for sale, excluding the leasehold Triple Y Residence in the Samyan Mitrtown mixed-use development.
Situated on a 314.5-square-wah plot on Ratchadaphisek Soi 7, Klos Ratchada 7 will feature an eight-story tower with 111 units, ranging from 26 to 36.4 square meters, priced from 2.99 million baht per unit. The project targets current renters in the Ratchadaphisek area, particularly those paying around 7,000 baht per month.
Frasers expects more than half of the units to be booked within the first two weeks of the launch.
In the first quarter of 2024, Frasers Property Thailand reported a 4.5% increase in revenue from its residential development business, reaching 2.37 billion baht compared to the same period last year.
by Daryl Lum | 20 May 2024 | Bangkok Property Market Updates, Investment Analysis
In the first quarter of this year, ownership of 3,938 condominium units valued at a total of 18.02 billion baht was transferred to foreign buyers.
The Real Estate Information Centre reported on Thursday that both the number of units sold to foreigners and their total value increased by 4.3% and 5.2%, respectively, compared to the same period last year.
Chinese nationals led the foreign buyers, acquiring 1,596 units worth 4.57 billion baht. Myanmar nationals ranked second, with 392 units valued at 2.21 billion baht transferred to them.
Russians were in third place, purchasing 295 condo units worth 924 million baht.
The centre noted that Chinese buyers made up 41% of the foreign market, while Myanmar and Russian buyers represented 10% and 5%, respectively.
by Daryl Lum | 17 May 2024 | Bangkok Property Market Updates, Expat Living & Relocation
A coalition of cannabis supporters urged the government on Thursday to reconsider its decision to reclassify marijuana as an illegal narcotic, following a recent policy shift just two years after its decriminalization.
Prime Minister Srettha Thavisin is advocating for cannabis use strictly for medical purposes, emphasizing a stringent approach to illegal drugs, which he claims are contributing to addiction and negatively impacting the youth.
Pro-cannabis groups met with Public Health Minister Somsak Thepsutin on Thursday, encouraging him to reconsider the policy reversal.
“Even for medical use, don’t subject the people’s plant to bureaucratic control. It has been integral to our culture for centuries. Licencing only breeds corruption,” stated Prasitchai Nunual, Secretary-General of Thailand’s Cannabis Future Network.
Thailand first legalized cannabis for research and medical purposes in 2018. In June 2022, the government led by Gen Prayut Chan-o-cha removed the plant from the national narcotics list, enabling cultivation, sale, and consumption.
This led to a surge in recreational use, with numerous cannabis cafes and dispensaries emerging nationwide, particularly in tourist areas, creating an industry projected to reach USD 1.2 billion by 2025.
Critics argue that the previous government rushed the liberalization process without drafting a comprehensive cannabis bill or clear regulations, resulting in public confusion and misuse.
Thailand has a long-standing tradition of using marijuana for pain relief and fatigue, as well as in traditional medicine and culinary practices. Mr. Somsak emphasized that cannabis should be limited to medical use.
Mr. Somsak’s predecessor, Dr. Cholnan Srikaew, had pushed for stringent legislation to curb recreational cannabis use. He had prepared a bill to clearly define approved medicinal uses and banned forms of consumption.
However, many cannabis businesses argue that the issue is not recreational use but the lack of clear regulations.
“There is nothing more sensible than a comprehensive Cannabis Act, addressing safety concerns like use among minors and regulated growth,” said activist and cannabis retailer Chokwan “Kitty” Chopaka.
“We do not support an uncontrolled cannabis market in Thailand but advocate for policies that support farmers, retailers, and medical users.”
by Daryl Lum | 14 May 2024 | Bangkok Property Market Updates, Investment Analysis
Thailand’s GDP is now projected to grow between 2.2% and 2.7% this year, a reduction from the earlier forecast of 2.8% to 3.3%, due to a sluggish export recovery, according to a prominent joint business group on Wednesday.
Exports, a crucial component of Thailand’s economy, are now expected to rise by 0.5% to 1.5% this year, down from the previously anticipated 2% to 3% increase, reported the Joint Standing Committee on Commerce, Industry and Banking, which represents these sectors.
Commerce ministry data revealed that in the first quarter of 2024, exports decreased by 0.2% year-on-year.
Last year, Southeast Asia’s second-largest economy expanded by 1.9%, which was below the 2.5% growth recorded in 2022 and behind other regional economies. The country is grappling with high household debt, increased borrowing costs, and the impact of China’s economic slowdown.
Last week, the finance ministry lowered its 2024 growth forecast to 2.4% from 2.8%, although it noted that growth could reach 3.3% if the government’s 500 billion baht (USD 13.5 billion) household stimulus plan is implemented in the fourth quarter as planned.
The tourism sector, another vital growth driver, is expected to attract 35 million foreign visitors this year, consistent with the previous forecast, the business group stated.
“Tourism is a factor that is clearly recovering,” Kriengkrai Theinnukul, chair of the Federation of Thai Industries, said during a media briefing.
The government aims to achieve a record 40 million foreign visitors this year. From January 1 to May 5, Thailand welcomed approximately 12.6 million foreign visitors, a 39% increase year-on-year, with about 2.5 million Chinese tourists, according to government data.
The business group expressed concerns that a proposed minimum wage hike could negatively impact the economy and investment. They plan to send a letter to the labor ministry requesting reconsideration of this move.
Prime Minister Srettha Thavisin has defended his proposal for a nationwide daily minimum wage of 400 baht (USD 10.8), arguing that it is essential for boosting growth, despite concerns from business groups about the potential rise in wage costs.
by Daryl Lum | 14 May 2024 | Bangkok Property Market Updates, Investment Analysis
Thailand’s economy is facing a “critical situation” that necessitates urgent stimulus measures and a potential rate cut, according to officials from the prime minister’s office on Monday (Mar 4). The country is striving to attract new investments from companies like EV maker Tesla.
Prime Minister Srettha Thavisin, who assumed office last August, is committed to revitalizing Southeast Asia’s second-largest economy, which has been hampered by weak exports and a slower recovery from the pandemic compared to its regional counterparts.
“Our data indicates we are not in good shape,” stated Prommin Lertsuridej, the prime minister’s chief of staff, highlighting issues such as low industrial capacity utilization and rising household debt.
Unexpected economic contraction in the fourth quarter of 2023 and a downgraded growth outlook for this year have intensified pressure on the central bank to heed the prime minister’s frequent calls for an interest rate cut.
Prommin, an experienced political strategist, noted that there is room for rate reductions, which would alleviate the financial burden on households by increasing their disposable income. However, he emphasized that the government would not interfere with the central bank’s decision-making process.
Srettha aims to position Thailand as a regional hub for various sectors, including electric vehicles (EVs), aviation, finance, and the digital economy. He has also urged lawmakers to enhance Thailand’s status in food, wellness, and tourism.
“We are taking all possible measures,” Prommin said, referring to initiatives like visa-free tourism, policies addressing household debt, and support for the vital agriculture sector.
A key election promise to distribute 10,000 Thai baht (USD 279) to 50 million Thais for local community spending is in the works, with implementation expected by late May, he added.
Critics have expressed concerns that the government’s numerous measures, especially the USD 14 billion “digital wallet” handout scheme, may not be fiscally sustainable and could fuel inflation.
Negotiations with Tesla
Thailand is in ongoing discussions with Tesla about potential investments in the country, an official from the prime minister’s office confirmed.
The government has proposed offering Tesla access to 100 percent clean energy for a facility in Thailand that could include EV and battery production.
“The decision now lies with Tesla,” stated Supakorn Congsomjit, without providing additional details.
Late last year, Tesla explored potential locations in Thailand, he added.
Traditionally dominated by Japanese automakers like Toyota and Honda, Thailand has recently attracted significant investments from Chinese EV manufacturers, including BYD and Great Wall Motor, totaling more than USD 1.44 billion.
To attract more foreign investment, Prommin said the government is working on several initiatives, including easing visa regulations, amending laws to improve business operations, and upgrading both physical and digital infrastructure.
by Daryl Lum | 14 May 2024 | Bangkok Property Market Updates, Investment Analysis
In the third quarter, Thailand’s economy expanded at its slowest rate in nearly a year, with experts predicting this sluggish trend will persist.
Official data released on Monday revealed that Thailand’s GDP increased by 1.5% year-on-year for the quarter ending in September. This figure fell short of the 2.4% forecast by economists surveyed by Reuters and was lower than the 1.8% growth recorded in the second quarter.
This marks the second consecutive quarter of slowing economic growth in Thailand.
“Public spending, inventories, and goods exports declined, despite strong private consumption and tourism,” noted Chua Han Teng, an economist at DBS Bank, highlighting that public spending capacity is diminishing due to populist policies.
Following a period of political stalemate and market volatility, Srettha Thavisin was appointed Thailand’s prime minister in late September. Economists foresee long-term economic recovery to be challenging under his leadership.
“The back-to-back quarters of weak GDP growth from the production side indicate an economy that is weaker than market sentiment suggests, despite strong consumption,” analysts at Bank of America Global Research stated in a report.
They also anticipated a more significant impact from tighter monetary policies moving forward.
In its September policy meeting, the Bank of Thailand raised its key interest rate for the eighth consecutive time, expecting economic growth and inflationary pressures to rise next year.
However, analysts at Nomura predict the Thai central bank will pause rate hikes at its upcoming meeting on November 29 and throughout 2024.
“We still see a risk of rate cuts as early as Q2 2024,” Nomura stated. “Importantly, the weak Q3 GDP results will likely strengthen the government’s push for a substantial digital wallet handout, despite uncertainties regarding its financing.”
A prolonged pause or potential rate cuts by the Bank of Thailand could also negatively impact the Thai baht, which has depreciated by 1.3% against the dollar this year and is on track for its fourth consecutive annual decline.
by Daryl Lum | Apr 26, 2024 | Bangkok Property Market Updates, Investment Analysis
A research firm suggests that the price index for new residential properties in Greater Bangkok is likely to continue its upward trajectory in the latter half of the year. This projection comes as older inventory gets absorbed following recent property stimulus measures initiated by the government.
Vichai Viratkapan, the acting director-general of the Real Estate Information Centre (REIC), highlighted that the government’s new stimulus measures, particularly aimed at residential properties priced at 7 million baht or lower, are expected to boost housing demand significantly.
“We anticipate seeing the impact of these measures in the second half as they facilitate the clearance of older inventory,” stated Mr. Vichai.
Once the existing unsold units are taken up, developers are poised to introduce new supply at higher price points, consequently leading to an increase in the price index during the latter part of the year, according to Mr. Vichai.
The recently introduced property measures include a reduction in transfer and mortgage fees to 0.01% from the previous 2% and 1%, respectively, for units priced at 7 million baht or below. Additionally, there are reduced interest rates for home loan credit lines of 3 million baht or lower.
According to the REIC, the price index for new low-rise houses and condos available for sale in Greater Bangkok experienced year-on-year increases of 2.5% and 0.2% in the first quarter of 2024, reaching 131.5 and 155.0, respectively.
The index for low-rise houses marked its fifth consecutive quarterly increase, while the condo index rebounded from 154.3 in the fourth quarter of 2023 to 155.0 in the first quarter of 2024, after reaching 155.0 in the third quarter and 155.1 in the second quarter of 2023.
By category and location, the most significant year-on-year increase in the price index was observed for single detached houses in neighboring provinces like Nonthaburi, Pathum Thani, and Samut Prakan, rising by 3.9% to 134.5.
This upward trend has persisted for over seven consecutive quarters since the second quarter of 2022.
The rise in prices was particularly pronounced among projects launched in 2022-23, attributed to escalating construction material costs, as per the centre’s analysis.
The area witnessing the most substantial increase for single detached houses encompassed the districts of Bang Phli-Bang Bo-Bang Sao Thong in Samut Prakan for unit prices ranging from 5.01-7.5 million baht.
Following closely were the districts of Lam Luk Ka, Khlong Luang, Thanyaburi, and Nong Sua in Pathum Thani in the 3.01–5 million baht range, followed by the districts of Muang, Lat Lum Kaew, and Sam Kok in Pathum Thani for units priced over 10 million baht.
The year-on-year increase in the price index for townhouses in these provinces exceeded that for single detached houses, rising by 4.1% to 133.8, rebounding from a decline in the fourth quarter of 2023.
The area experiencing the most significant increase in the townhouse category was Bang Phli-Bang Bo-Bang Sao Thong for unit prices ranging from 2.01-3 million baht, followed by Lam Luk Ka-Khlong Luang-Thanyaburi-Nong Sua, also within the same price range.
The price index for condos followed a similar trajectory to that of low-rise houses, with the most substantial year-on-year increase observed in neighboring provinces like Samut Prakan and Nonthaburi, rising by 1.2% to 143.2, according to the REIC.
The area witnessing the largest price increase for condos was the Muang and Pak Kret districts of Nonthaburi in the 2.01-3-million-baht range, followed by Bang Phli-Bang Bo-Bang Sao Thong with unit prices ranging from 1.5-2 million baht.
In Bangkok, the condo price index saw a marginal year-on-year increase of 0.01% to 157.7, with the most significant rise observed in the Huai Khwang-Chatuchak-Din Daeng districts for units priced between 3.01-5 million baht.
Second was the Thon Buri area within the same price range, while third was the Bang Sue-Dusit district for units priced between 5.01-7 million baht.
Mr. Vichai noted, “An improved economy can help enhance housing affordability and increase access to mortgages as housing prices rise.”
by Daryl Lum | Apr 25, 2024 | Bangkok Property Market Updates, Investment Analysis
Record-breaking land prices in Bangkok’s central business district have led to unprecedentedly high prices for new luxury condominiums, according to real estate consultant Property DNA.
“This year, we’ve witnessed a surge in the introduction of new condo projects priced at over a quarter million baht per square meter, a rarity compared to 2019,” stated Surachet Kongcheep, managing director of the firm.
These ultra-luxurious condo developments are situated in prime areas such as Rama I, Phloen Chit, Wireless Road, Silom, Sathorn, Rama IV, specific segments of Sukhumvit Road, and along the Chao Phraya River.
Despite the steep prices, buyers are swiftly purchasing these units, with some projects reporting booking rates ranging from 65% to 85%.
High-rise condos near Lumpini Park are particularly sought after due to their rare views of the city’s green space. The absence of nearby train stations isn’t a deterrent, as many buyers prioritize privacy over convenience.
Surachet also forecasted that prices for new luxury condos will soon reach up to 600 million baht per unit, as major developers pay record prices for vacant plots in prime CBD locations.
An example of this trend is Sansiri Plc’s acquisition in 2020 of a 1 rai (1,600sqm) plot on Sarasin Road for 1.56 billion baht, setting a new record for land prices in Thailand. The company plans to develop a high-end condo on the site.
Property DNA also anticipates that affluent buyers will seize the opportunity to purchase luxury condos in mixed-use projects such as One Bangkok on Wireless Road and Dusit Central Park on Rama IV Road.
“Both Thai and foreign buyers have already displayed interest in these projects, even before official sales have commenced,” Surachet remarked. “Developers have also partnered with operators of five-star hotels to oversee these projects, further enhancing their value and prices.”
