(CTN News) – Thailand: As a result of the Cabinet’s recent decision, foreigners’ property leaseholds will be extended to 99 years and foreign ownership will be increased from 49% to 75% of condominium projects, which will attract new foreign investors and improve the current market slump.
The Real Estate Information Centre (REIC) of the Government Housing Bank has expressed its support for a significant policy adjustment that is intended to revitalize the real estate market in Thailand.
The Most Important Takeaways
- The Real Estate Information Centre (REIC) of the Government Housing Bank has expressed its support for a new real estate policy that is inclusive of international buyers.
- Under the agreement reached by the Thai Cabinet, the percentage of foreign ownership in condominium buildings would be increased from 49% to 75%.
- The modification of the policy is a reaction to the huge decrease in buying power that Thai consumers have experienced.
It is anticipated that the recent decision made by the Cabinet to boost the foreign ownership percentage in condominium developments from 49% to 75% and to prolong the leaseholds for foreigners on properties from 30 years to 99 years would attract foreign investors and relieve the present market depression.
Wichai Wiratkapan, the Director of the REIC, emphasised the critical nature of these measures by mentioning a significant rise in the number of housing units that have not been sold. A total of 213,429 unsold units with a value of about 1.21 trillion baht were now available as of the first quarter of this year. This represents a 36.5% increase in comparison to the same time in the previous year.
To entice international purchasers, notably executives of multinational corporations and digital nomads, to engage in Thailand’s real estate market, it is essential to implement measures such as prolonged leaseholds and larger ownership percentages.
The policy has changed in reaction to a notable decline in Thai consumers’ buying power. The problem has become worse as a result of banks implementing stricter lending standards since January as part of a Bank of Thailand initiative to stop the increase of non-performing loans (NPLs). Higher-class customers looking for 10-million-baht loans are now being impacted by the trend of many borrowers seeking house loans under 3 million-baht being turned down.
Government investment initiatives
Wichai stressed that to avoid long-term detrimental effects on the real estate market, these policies should be properly implemented and controlled. He recommended testing the measures in designated areas, such as special economic zones, large cities, and popular travel destinations including Bangkok, Phuket, Pattaya, and the Eastern Economic Corridor (EEC).
With this strategy, authorities could assess the effects and make the required modifications. The REIC director also drew comparisons with previous policies, pointing out that, to boost the market after the Tom Yam Kung crisis, foreigners were allowed to acquire 100% of condo complexes from 1999 to 2004. Similar short-term solutions, he added, may work well in the present situation.
The head of the Thai Real Estate Association, Pornnarit Chuanchaisit, expressed hope that the real estate market will rebound in the next three to six months. He ascribed this possible rebound to government investment initiatives, the impending peak travel season, and the digital wallet distribution programme, all of which are anticipated to strengthen the economy in the latter part of the year.
Foreign investors now have more security and stability for their money when they lease land in Thailand, thanks to the country’s expansion of property leaseholds. By providing them with better conditions for property ownership, this action aims to draw in more international investors to the Thai real estate market.
To encourage international investors to engage in Thailand’s real estate market, certain property developments have raised their foreign ownership percentages. This allows foreign investors to have a greater interest in particular projects. By enticing more foreign money into the nation, this strategic plan aims to boost the real estate market and propel economic development.
Thailand hopes to become more competitive in the international real estate market and establish itself as a desirable location for foreign investment, especially in the real estate industry, by putting these policies into place. This is especially significant in light of the current difficult economic climate since it shows initiative in luring in foreign investment and promoting economic growth.
Source: Thailand-business-news
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