Strategies to Attract Deals for Foreign Condominium Ownership.

The idea of increasing the foreign ownership limit was first proposed during a cabinet meeting in April. The government is exploring this change to stimulate the economy and attract more international investors. By allowing foreigners to own a larger share of condominium units, Thailand hopes to become a more appealing destination for overseas property buyers.

Local property industry leaders have strongly advocated for raising the foreign ownership cap. They point out the growing interest from international buyers eager to invest in Thai real estate. Increasing the limit could open up more opportunities for foreign investors and give a significant boost to the local property market.

REIC (Real Estate Information Center) Reported

The domestic property market in Thailand is currently facing several challenges. High levels of household debt and stricter lending criteria have reduced demand among local buyers and property owners. Consequently, developers have become more cautious. The Real Estate Information Center (REIC) reports a significant 19.7% drop in land allocation permits during the first quarter of this year, marking the largest decrease in nine quarters. This drop reflects developers’ responses to a continued decline in low-rise house transfers.

The REIC also notes that many popular locations for foreign buyers, like Phuket and Pattaya, have already hit their foreign ownership limits for condominiums. This high demand from international investors highlights the potential benefits of increasing the foreign ownership limit.

Vichai Viratkapan, the acting director-general of the REIC, has suggested that to boost economic activity in areas with low domestic interest, the government should consider raising foreign ownership limits. This change could help support the condo market, which is increasingly driven by foreign demand.

To address the high number of foreign buyers, several initiatives have been introduced. For instance, some condominium developments now offer leasehold units priced 10-15% lower than freehold units. This approach aims to meet the needs of foreign buyers and provide more affordable options.

 

Demand Trends:

The data from 2023 reveals that foreign investors have been actively engaging in the Thai condo market. Foreigners ownership completed 14,449 condo transfers during the year, marking a 25% increase compared to the previous year. The total value of these transactions surged by 23.5% to 73.1 billion Thai Baht, surpassing pre-pandemic levels. This growth highlights the robust demand for Thai condominiums among international buyers.

Among the foreign buyers, Chinese investors were the most active as an ownership, accounting for 45.8% of the total condo units transferred and 46.7% of the total transaction value. Russians, Americans, and Myanmar nationals were also significant players in the market, reflecting a diverse international interest in Thai real estate.

The proposed changes to foreign ownership limits and leasehold periods represent a strategic move by the Thai government to boost the real estate sector and attract more foreign investment. As the government continues to explore these possibilities, the potential for increased foreign involvement in Thailand’s property market could offer new opportunities for growth and development.

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