Thailand’s biggest property developers are excited about the reforms floated for the country’s real estate market. Among the rumoured proposals are longer-term leases for foreign investors, which were suggested by Finance Minister Apisak Tantivorawong in March.
“If I speak for all developers, I quite like a long-term leasehold. Today, the leasehold for foreign property buyers is just 30 years. But if the government can extend from 30 years to 50 years, I think that would be better. This might lead to more single-detached homes, even land, for foreign people to invest in,” says Uthai Uthaisangsuk, Senior Executive Vice President at Sansiri Plc.
At the moment, Thai laws bar non-citizens from buying freehold land and single-detached homes, but there is a provision that allows for a one-time renewal of leases for up to 30 years. There are no such restrictions on condos, as up to 49 percent of a condo project can be made available as freehold to buyers from abroad.
“If the government opens up the opportunity for foreign buyers to hold residential leases for up to 99 years, like Singapore and Malaysia do, it will boost residential demand as the country is the gateway to the ASEAN Economic Community,” says Prasert Taedullayasatit, President of Premium Market at Pruksa Real Estate Plc and the Thai Condominium Association.
Most demand from expatriates and foreign buyers tends to be for popular locations such as Langsuan and Wireless Road where returns are the highest. Capital gains on land sold along Wireless Road alone rose from THB1.4 million per sq. wah in 2011 to THB 1.9 million in 2015.
“Location has to be the best when you do luxury. The 2nd thing to remember is the development itself. You have to pay attention to the design and service. If you build a development where the best comes as standard, it’s likely that affluent individuals are going to buy,” says Uthai.
This story appeared on property-report.com
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