Thailand – Confidence in condos

Confidence in condos

Tony Liaw
Thursday, June 13, 2013
http://www.thestandard.com.hk/news_detail.asp?we_cat=16&art_id=134530&sid=39804827&con_type=3&d_str=&fc=7

Among southeast Asian nations, Thailand seems unable to attract a lot of foreign investors to its property market. And it’s probably due to some myths about Thai taxation, said Apichart Chutrakul, chief executive of property developer Sansiri.

Foreigners are technically prohibited from owing land in Thailand under their own names, he said.

“However, under the Condominium Act, 49 percent of the liveable square meterage of a condominium building can be owned by foreigners,” Apichart said.

“This enables people to purchase condominium units under their own name, without having to resort to registering a company in Thailand.”

And Sansiri, which specializes in selling condominiums, is eyeing overseas buyers.

“We have a solid marketing plan to increase the portion of foreign condo buyers from 3 percent to 10 percent within the next three to five years,” Apichart said.

In fact, Bangkok has seen its condo market grow rapidly over the past 25 years.

In 1998, the Thai capital had less than 10,000 units, currently there are more than 350,000 units, data by CB Richard Ellis show.

Prices have also gone up, rising to 23,225 (HK$5,822) baht per square foot from 3,250 baht psf 20 years ago.

Sansiri expects the stable demand for residential units to continue, particularly in the up-country market and holiday destinations such as Phuket, Pattaya and Chiang Mai.

“We expect a 14 percent increase in presales – from 42 billion baht in 2012 to 28 billion baht this year – as

a result of the expansion of the mass transit system, growing consumer confidence and a rising pace of urbanization amidst a low interest rate environment,” Apichart said.

He added that the condo segment has long-term market potential.

At the same time, Thailand’s central bank is staying alert over the possibility of an asset bubble, warning that any breakdown would badly hamper the already slow recovery from the global financial crisis.

“We need to be cautious and monitor the situation very closely, and prepare measures to cope with any possible problem,” Songtham Pinto, director of the Bank of Thailand’s macroeconomy division, told a property seminar recently.

But developers are taking a different view as large firms have dominated Thailand’s housing market and are capable of responding to risks in a timely manner.

The sector also warned that wrong measures – usually targeting short-term speculators – could greatly affect buyers.

As one of the largest developers, Sansiri is kicking off a roadshow for its latest project this weekend.

It is offering 206 residential units, with sizes of 640 to 2,830 sq ft, at its beachfront condo project Baan Mai Khao, Phuket. Prices range between HK$1.75 million and HK$13.25 million. The roadshow runs on Saturday and Sunday in Hong Kong, and July 6 and 7 in Singapore.

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