Some of Thailand’s biggest banks are offering special mortgage promotions as they look to increase the number of home loans they provide in 2017. While mortgage rejection rates are still at near record levels in the country, both Kasikornbank and TMB Bank are getting creative to meet their home-loan targets, reports local media.

Kasikornbank recently launched its Super Value K-Home Loan Festival marketing campaign that will offer increased loan limits as well as special discounts from the bank’s partners, says Alongkot Boonmasuk, Head of Kasikornbank’s Housing Loan and Micro Loan Product Management Department, to The Nation.

The bank will allow loan limits of up to 90 per cent of the property purchase price to be granted. Those applying will also be eligible to obtain additional financing under the K-Home Decor Loan scheme with up to 10 per cent of the property purchase price available for decor financing. Kasikornbank will allow the combined amount to be no more than 100 per cent of the appraisal price.

Interest rates for the loans will be set at 0 for the first 3 months, then 3.5 per cent between the 4th to 12th month. Beyond that, the loan will be based upon the minimum retail rate minus a discount. Customers participating in the campaign are also eligible to receive privileges and discounts from Kasikornbank’s business partners.

Applications will be accepted until the end of October and the bank believes the promotion will help it bring in as much as THB 8 billion in new home loans in the coming months. Kasikornbank is targeting THB 52.9 billion in new home loans in 2017.

TMB Bank is another institution offering a mortgage promotion to help it reach home loan targets this year. The bank is offering a fixed interest rate of 4.25 per cent for the first 3 years of a home loan. That promotion will run from now until the end of July.

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There is a new promotional campaign in Thailand designed to encourage people to stop using cash and start using debit cards by offering a slew of cash prizes, local media reports. The Finance Ministry is hoping to increase electronic payments in the country and improve the national e-payments policy.

The new campaign will see prizes be randomly awarded to debit-card users in Thailand with lucky draws scheduled to take place in June. The giveaways will continue on for the next 12 months with a total of THB84 million expected to be handed out to winners during the scheme.

Shoppers must pay for goods or services through debit cards issued by Thai banks to be eligible for inclusion into the lucky draw. Shops with less than THB 500 million in annual revenue that have installed or upgraded their EDC machines as authorised by the government will also be entered into the giveaway, according to media reports.

This is the government’s latest effort to promote the national e-payments policy in recent times. In March, it promoted the installation of the electronic data-capture (EDC) system for machines at retail outlets throughout Thailand.

“At the same time, shops – especially small ones – will be encouraged and inspired to install EDC machines. Such concerted efforts would eventually change people’s payment behaviour, leading to extensive use of electronic payments nationwide,” says Permanent Secretary Somchai Sujjpongse to The Nation.

A total of 1,001 shoppers will win each month with most prizes ranging from THB2,000 to THB100,000. The top prize for individuals is THB1 million. The list of winners will be announced through the media as well as on www.epayment.go.th. Banks issuing the debit card of the winners will notify them. Shops will also have the chance to win a grand prize of THB 1 million and several smaller prizes of THB30,000 each month.

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Of all the things people could buy, house and car are always on top of the list. They are universal assets, equally perceived as a fundamental success when ones could buy by their own money. As they are often equally valued, the intriguing question arises as which one is a worthier purchase when the budget is limited. There is no right or wrong in choosing either of them, however these three points would help clarify whether the house or the car is your right choice.

Necessity

Put your ego aside for a moment, and consider whether the asset is actually necessary or not. If you are still paying monthly rent to live, a new house or condo would be a worthier choice. Turn those rents into installments for the new asset, to live in a place that you can wholeheartedly call, a home. One advantage house has over car is its price that keeps rising as a nature of real estate, in contrary car’s will only depreciate. Afterward, your heirs could also inherit the property for their own uses, or you could sell it and make a decent profit.

On the other hand, if you already have a home, perhaps living with family, and your place happens to be distant from the main road or remote from your workplace in the inner city, then a car would be the right choice. Especially if you are a woman who comes back home late at night from work, and needs to walk down a long dark alley to reach the home, a personal vehicle would be necessary.

Financial Ability

Once you have decided which asset to buy, the next step is assessing your financial ability. To negate financial risks, your monthly repayments for the loan shouldn’t exceed 40-60% of your salary; however, to stay in a safe zone, 30% is the maximum. The amount of debt you can take also depends on your level of income; the more earnings, the larger loan size you can leverage on. Your financial ability represents how large a new house or how luxury a car you should pursue. Assume you earn 30,000 baht per month, as mentioned, the monthly installment shouldn’t exceed 40% which is 12,000 baht. With this financial ability, you can apply for a home loan 1.2 million baht with 20-year term, or a car priced at 600,000 baht with 5-year repayment. Those are a townhouse in the suburb and an eco-car, to illustrate.

3 Daily Cost Savings For A New Home 

Down Payment

The third point to bear in mind is the down payment. You cannot apply a loan for the full amount as banks usually limit the credit line. Therefore, you need to have a sum of money before purchasing a house or a car. In general, you should spare at least 20% of the house price, or 25% of the car price, for the down payment. To elaborate, if you plan to buy a 2-million-baht house in the next two years, you would need 400,000 baht for the down payment; converted into monthly savings, you need to put around 16,000-17,000 baht into account every month from the start. If that saving amount seems a little too high, you might want to extend your saving period, from two to three years, or lower down your target from a 2-million to 1.5-million-baht house, for a more flexible pursuit.

Choosing between a new house or a new car takes some time to come to a conclusion, as both are highly valued in the norms of modern society. Without the anchor of guidelines, our desires tend to sway between the two. It’s a large capital not to be spent on the ground of ego, but the logic and necessity which align with your financial ability. Hence, these three checkboxes would help clarify your decision. For more confidence in buying properties, you can read Buying Guides or gain insights from the daily Property News.

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The article is written by Nitchanee Chantasart, CFP of Kasikorn Bank, and translated by Sitth Chongprasobtam

When it comes to buying a home, unless you have deep pockets to spend a full price at once, one should have at least a saving equal to twenty per cent of the house price for the down payment before applying for a home loan, as banks usually limit the credit line. If your saving happens to be under the number, it is time to accumulate more money through these simple tips in your daily routines.

Notes that expats can purchase a house in Thailand only under the name of Thai spouse or in the form of corporate where the dominant shareholders are Thai nationals. Buying Guides.

1.Consumptions

Foods are basic needs for human survivals yet in each day we consume more than what we really needed, to the extent of unnecessity which does not only incur more expenses but also deteriorate our health. Instead of dining in a restaurant as a habit, allow you wife to show more home cooking skill; not only it’s a turn down on service charge and VAT expenses, a greater bond of relationship can be formed through new shared experiences too.

Drinks are another expense you could avoid. A daily purchase at the coffee shop, especially from Starbucks, comes with a painful price. Be your own brewer for the cost saving and intimate taste that on one can duplicate. Soft drinks are totally unnecessary; it takes away your cash but, instead, brings a doctor closer.

2.Transportation

For the convenience, many people take cabs on a daily basis; some take twice a day back and forth between workplace and home. Assume that it costs 100 baht per ride, a week would sum up to 1,000 baht excluded weekends, a month would cost 4,000 baht, a year for 48,000 baht; that’s a huge number which can be spent on your home purchase. The travelling expense could be minimized by taking mass transits, which are now expanding to cover more areas in Bangkok Metropolitan Region. It may be a trade-off between privacy and lower price, but certainly a great escape amid traffic congestion during prime time. You don’t have to be so frugal to the point of feeling compelled to take a public bus that costs five to ten baht per ride. Instead, be balanced.

3.Lifestyle

Lifestyle is the word that summarizes your total expense. A smoker would spare daily money for cigarettes. A traveler would prepare a budget for trips. A party lover would spend the least during midweeks for the Friday night party, the list goes on. A new home would be possible only if you learn to cut off the unnecessary habits. Nevertheless, travelling is undeniably a universal way to rejuvenate soul and mind after a tiring work period. To still travel but spend less is to shift your destination and mode of transportation, from abroad to domestic or from high-end to low-cost airplane, or perhaps, to train. Another unavoidable spending is the use of smartphone; however, you could save a lot of money by not purchasing every new version it comes out, as long as your own still work effectively.

Reviews for Condominiums, Townhomes, and Single Houses

A small change is insignificant, but as it is carried through to become a habit, the unforeseen result is totally different, recalling the case of taking cabs every day. Focus on necessary and cease the unnecessary is the key for the simple daily cost savings tips. “I alone cannot change the world, but I can cast a stone across the waters to create many ripples,” said Mother Teresa. You’ve got a stone in your hand, and your new house can be reached through the ripples.

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The article is written by Nitchanee Chantasart, CFP of Kasikorn Bank, and translated by Sitth Chongprasobtam

In general, foreigners can apply for a mortgage loan to purchase a house or a condominium only if they have a Thai spouse. If the couple purchase a house, the foreigner will have no right to claim the ownership of the property. However, foreigners can own a condominium under his/her name according to the law. In both cases, the foreigner can apply for a mortgage loan as a borrower, co-borrower, or guarantor. Assume that a foreigner decides to purchase a condominium’s unit with his/her spouse as a co-borrower. They help paying off the loan until a certain period, then the relationship breaks down and they decide to divorce. What should they do with the installments-remained property? Who will own the property?

1.Sell The Property

As a couple decide to break up and stay apart, there is little chance for the two to continue the repayment. Therefore, the best solution is to sell the property with consents from both parties. After the property gets sold and the loan is paid off, there could be some profits that the two might share in half. Nevertheless, without a signed contract, there is nothing guaranteeing the profits will be shared with justice. Hence, a couple should make a contract stating all rights and obligations in case of divorce, or any other circumstances, which might possibly happen in the future.

2.Refinancing

If the couple divorce but one of the parties decide to proceed the repayment, the bank would assess his/her ability to pay off the loan. If bank does not approve, then he/she must refinance the property with other banks who allow a new co-borrower to come assist. Note that the decision to proceed the repayment alone must be made with the consent of your spouse. Typically, refinancing will incur some fees despite the lower interest rate.

3.Court

The worst case scenario is when the couple get lost in contact without making any consents about the installments-remained property. If one party decide to continue the repayment, in case of condominiums, the ownership will be given to the other party as well when the loan is paid off. In this situation, the victim must bring the case into the court with a request to take off the co-borrower name. If the plaintiff could show the evidence of repayment from the bank, he/she holds a higher advantage in this deal. Nonetheless, only until the judge decide that the co-borrower name can be deleted, the ownership of the property is still remained for the two parties.

In conclusion, relationships always involve around uncertainty, but the property can be secured by forming a contract which states all rights and obligations when the two parties break apart. The three solutions provided illustrate different scenarios which could happen in the real life. Following these guides could less or more facilitate this potential issue; however, the best way to prevent this is to keep your love life healthy and strong.

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The article is written by Kittikom Pojanee and translated by Sitth Chongprasobtam

We have known that foreigners are restricted to buy only condominiums in Thailand’s real estate market, but where can they borrow a mortage to buy this type of property? Most commercial banks in Thailand, though offer a mortage for foreigners to buy condominiums, still have a multitude of financial products to service locals; meaning the area of mortgage loan for foreigners might not be specialised and still has tightened terms and conditions to be qualified for.

MBK Guarantee, a wholly owned subsidiary of MBK Group, alternatively, is another channel for foreigners to borrow a mortage loan with confidence. The company, with capital registered of THB 500 million, specialises in mortgage loan for foreigners and has native-speakers staffs to negate the communication issue. The prominent point are their friendly requirements where foreigners are not requied to be permanent residence or employed in Thailand, no restrictions for specific nationalities, no Thai spouse is required, and borrowers with age of 70 are still legitimate, for examples.

Furthermore, the loan purpose can be for buying a new or second hand condo, refinancing existing loan or releasing equity; moreover, both ready-to-move and under-construction condos are legitimate for the use of loan. One of a few conditions MBK Guarantee has is that the proposed condos must be located in prime areas such as Bangkok Metropolitan region or key resort areas such as Chiang Mai, Udon Thani, Chonburi, Petchaburi, Prachuap Khiri Khan, Phuket and etc.

In detail, the currency used for the transaction must be in Thai Baht, the loan amout can be up to 50 per cent of the property value, the minimum loan size must not be less than THB 1 million, the loan term is from 1 to 10 years, the payment is made in monthly installment required with option for balloon payment (up to 50% of loan) at maturity, fire and life insurances are required throughout the contract.

For the interest rate and fees, MBK Guarantee refers to Siam Commercial Bank’s MLR plus 2.3 percent per annum. The upfront fee is 1.25 per cent of the loan size (min THB 30,000), commitment fees accounts for 2 per cent of non loan disbursement, and prepayment fees is 2 percent of the prepaid loan amount for the first 3 years only. Other expenses are mortgage fee with 1 per cent of the loan size, duty stamp with 0.05 per cent of loan size (max at THB 10,000), while appraisal, insurance, and OUT-OF-POCKET fees are subject to the authorities.

Documents that you need are ID/passport which must be valid for at least 6 months, Marriage/divorce certificate as some cases the borrower may need the Thai spouse as a co-borrower, Spouse consent to borrow/mortgage property, Bank statements for 6 latest months, Credit bureau reports from country of residence, etc. The documents required are also different if you borrow a mortgage in the form of corporate. Other than this, you also need property documents such as Condominium title, Valuation report by preferred appraiser, depposite/installment receipts, etc.

*The article does not state that MBK Guarantee is the only financial service that offers mortgage loan for foreigners, but rather one of the channels where foreigners can borrow a mortgage loan to buy properties in Thailand with convenience.

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This article is written by Sitth Chongprasobtam, a content writer at DDproperty.com. For more information, please contact Sitth@ddproperty.com

The first three months of every year is the tax return filing period among all income earners in Thailand, including Thai nationals and foreigners. According to the current tax rate in the table 1, each person is conformed to a specific rate regarding his/her income range. However, there are numerous ways to minimize this annual expense, mainly divided into Deductions and Allowances as follows:

Deductions

1. Income from employment – 40% but not exceeding 60,000 Baht 
2. Income received from copy right – 40% but not exceeding 60,000 Baht
3. Income from letting out of property on hire
   1. Building and wharves – 30%
   2. Agricultural land – 20%
   3. All other types of land – 15%
   4. Vehicles – 30%
   5. Any other type of property 10%
4. Income from liberal professions – 30% for the medical profession where 60% is allowed
5. Income derived from contract of work whereby the contractor provides essential materials besides tool – actual expense or 70%
6. Income derived from business, commerce, agriculture, industry, transport, or any other activities not specified in 1 to 5 – actual expense or 65% – 85% depending on the type of income 

Allowances

1. Taxpayer self care allowance – 30,000 Baht
   
2. Spouse care allowance – 30,000 Baht
   
3. Child care allowance (age under 25) – 15,000 Baht for each child (limited to 3 children)
4. Child education allowance (age under 25) – 2,000 Baht for each child (limited to 3 children)
5. Parent care allowance (age over 60 with income below 30,000 Baht per year) – 30,000 Baht for each parent 
6. Disabled/incompetent persons care allowance – 60,000 Baht for each such person 
7. Health insurance for parents (age over 60 with income below 30,000 Baht per year) – Amount actually paid but not more than 15,000 Baht for each
8. Life insurance – Amount actually paid but not more than 100,000 Baht for each
9. Life insurance pension fund – 15% of assessable income, but not more than 200,000 Baht
10. Provident fund – 15% of assessable income, but not more than 500,000 Baht
11. RMF (Retirement mutual fund) – 15% of assessable income, but not more than 500,000 Baht
12. NSF (National savings fund) – 15% of assessable income, but not more than 500,000 Baht
13. LTF (Long term equity fund) – 15% of assessable income, but not more than 500,000 Baht
14. SSF (Social security fund) – Amount actually paid 
15. Home loan interest – Amount actually paid, but not more than 100,000 Baht
16. First home buyer during the period of 01 Jan 2016 to 31 Dec 2016  (below 3 million Baht) – 20% of the first home price, claimed in equal amounts over 5 consecutive tax year
17. Domestic travel and hotel costs during 01 Jan 2016 to 31 Dec 2016 – Amount actually paid, but not more than 15,000 Baht
18. Songkran dining and travel costs during the period of 09 to 17 April 2016 – Amount actually paid, but not more than 15,000 Baht
19. OTOP products purchases during the period of 01 to 31 August 2016 – Amount actually paid, but not more than 15,000 Baht
20. Year-end shopping during the period of 14 to 31 Dec 2016 –  Amount actually paid, but not more than 15,000 Baht

Table 1 (Source: The Revenue Department)

All taxpayers must file the tax return and make a payment to The Revenue Department within the end of March for each tax year. You can also down load the tax return e-form at www.rd.go.th. For more information, please visit http://www.rd.go.th/publish/index_eng.html

Sources: http://www.rd.go.th/publish/6045.0.html
http://sherrings.com/personal-tax-deductions-allowances-thailand.html

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While property owners continue to familiarise themselves with the new land and buildings tax passed by the Thai cabinet, some feel these will have a short-term negative impact when they take effect next year. However, Suphin Mechuchep, managing director of JLL, pointed out that the new taxes should promote a more efficient use of land and will actually benefit Thailand’s property sector.

For example, some landowners will be forced to make better use of property currently vacant if they wish to avoid paying taxes at a higher rate. Others will likely sell off surplus property in order to avoid additional taxes.

JLL added that property owners who are forced to sell their land because of the new taxes are likely to adopt a flexible pricing strategy in order to speed up the sales process. This includes possibly reducing asking prices. On the other hand, owners backed by significant capital are unlikely to lower their price expectations, especially if the property is in a prime location.

Another benefit of the new land and buildings tax is that it should help curb speculative property purchasing. “The land and buildings tax will increase risk exposure to speculators who acquire a property asset with the hope to hold it until it becomes more valuable and then resell it for profit,” Suphin explained. “With the new tax, holding a property can be costly, particularly when the property is left unutilised or does not generate any income.”

It was also noted by JLL that there remains no clear answer as to whether the existing rental tax (12.5 percent of the annual rental value or the annual assessed rental value) will remain or be replaced by the new land and buildings tax. This could increase rental rates across the board.

“Whatever the case may be, landlords would be undoubtedly pass on any additional cost resulting from the new tax to tenants,” Suphin added. “This would eventually push up gross rents in all property sectors. Nonetheless, the amount of tax that owners would pass on to tenants may vary from sector to sector.”

The land and buildings tax finally won approval from the Thai cabinet and it could generate as much as THB64 billion, up from the current THB30 billion, for the government when it goes into effect in 2017. Experts have expressed some concern that the new taxes could put off property investors from purchasing units in Thailand.

The tax-ceiling rate will be set at 0.5 percent for residences priced over THB50 million. Houses under this amount are not subject to the tax. Any home valued above THB50 million is subject to a progressive tax at 0.05 to 0.1 percent. Second homes will also be subject to 0.03 to 0.3 percent tax as well as any additional home after that.

Landowners will also be required to pay more for undeveloped land and the new tax-ceiling rate will be no more than five percent. The rate will also be progressive and for every three years the land stays undeveloped, an extra one to three percent will be tacked on. For real estate companies, it is reported that land banks awaiting development will be taxed at 0.05 percent for three years once ownership of the land is transferred while non-performing assets of financial institutions will pay a tax rate of 0.05 percent for five years.

Issara Boonyoung, Thai Housing Association advisor, pointed out that 90 percent of homeowners will not be affected by the new land and building tax. The primary goal of the new legislation is to focus on wealthy individuals who own huge vacant land plots or blocks of residential units. And while there is some concern that property investors will be reluctant to buy additional units, RHB Thailand noted that with asset appreciation of five to seven percent per asset for prime area property, the extra tax of 0.03 percent to 0.3 percent is relatively small by comparison.

There was also some worry that the new taxes could see banks take a hit on their earnings, however, experts are expecting only a minimal impact in 2017. They estimate that the additional expenses for the ten listed banks will likely be around THB40-50 million which would be less than 0.05 percent of RHB Thailand’s 2017 earnings forecast for the sector.

The termination of the tax exempt status for property funds was recently approved by the Thai cabinet and the change will take effect next year after being published in Royal Gazette. RHB Securities believes the move is most likely to take effect some time in the second quarter of 2017. The key objective of this revision is to force property funds to convert their status to Real Estate Investment Trusts (REIT).

At the moment, the business operation of assets in Thai property funds are exempt from value-added tax (VAT), specific business tax and stamp duty. However, these expenses have been fully charged on the operation of assets in Thai REITs creating an interesting split between the two.

If this revision does take effect, RHB Securities noted that the tax-related operating costs for property funds will be as same as REITs. This means the cost advantages of property funds over REITs will disappear and could significantly impact the former. Currently there are 52 property funds listed on the Stock Exchange of Thailand with 47 of them paying dividends to unitholders continuously. If the revision does take place, this will result in an increase in tax-related cost of operating assets. According to RHB, pressure could be placed on property funds’ dividend yield on average and might see them decline from the 6.2 percent per annum they currently pay out.

Ticon Industrial Connection currently owns three property funds and one REIT and the company’s management commented that the revision cannot force the company or property fund unitholders to convert the fund status to REIT. The local institutional investors of the property fund would likely vote against any attempts to convert since they will have to pay 20 percent withholding tax on dividends received from REITs compared to property funds where no withholding tax needs to be paid.

RHB speculates that the government may revise the law relating to the withholding tax rate for property funds charged on local institutional investors in the future but doing so would be difficult. That’s because it will affect property funds and other types of mutual funds held by these local institutional investors.

Special Advertising Feature: Cashback isn’t a new sensation, it’s already a given in certain markets and an effective way of popularising a product and (re-)generating sales. Leading insurance companies, supermarkets, travel and accommodation sites, even gas stations, are already offering cashback sales to entice new business and create greater loyalty, but it’s a somewhat new concept to the Thai property market.

Actually, that’s not totally true. Cashback has been around for some time with regards to property sales; agents and developers have been offering cash gifts and rewards to buyers for several years now, especially during those not so prosperous times, but it is something we’ve not yet seen or heard of before in the Thai Property market. However, that may be about to change.

Property Sumo
www.propertysumo.com is leading the way, becoming the first Thai property company to offer Cash-Back rewards on every deal they make; that includes all sales and rentals. The first company of its kind in Thailand, Property Sumo isn’t a gimmick or one time offer, the main concept of the business is built around their cashback system and promises to give each and every customer a cash reward.

Founded by Bangkok property mogul Varin Narula, we predict that Property Sumo is about to inject some new life and energy into the Bangkok Property market. With a large database of properties to fit just about every taste and budget, and a slick, modern website which has user experience as its heart, making searching and sorting properties a breeze, they are certainly someone to take seriously, but it’s their promise of cutback on every property they rent and sell, which is sure to put their name firmly on the map.

How it works
It’s a very simple concept. When you rent or buy ANY property through Property Sumo you are entitled to a cashback reward of around 25% of one month’s rent or 1% of the sales price. Their prices are not marked up, and are in fact equal to what you’ll see on the same and similar properties priced on other Bangkok properties sites. Below each rental and sales price you’ll also see a green highlighted cashback figure which is the amount you will receive once the deal has been complete (customers should expect to receive their cashback in full around 1-2 month after the ink has dried on the contract).

How do they do this? Again, it’s pretty simple, Property Sumo share their commission and profits with their customers. There’s no small print or hidden charges or any unwelcome surprises at all, they simply reward their customers by giving them a cut of the money they make through these deals, so as soon as the referral fee checks have cleared the customer gets rewarded with a cash reward.

Is it sustainable?
What are the possible flaws in this idea? For the client it seems none at all, it’s very much a win-win situation. The cashback amounts are a fixed percentage of the sale or rental agreement, so there’s still the opportunity to barter and haggle over the price with the usually amount of flexibility, after which the cashback amount is adjusted accordingly. It’s also a great deal for property owners and landlords who are not affected in any way as the cash comes directly out of property sumo. For Property Sumo there is the fact they will be handing over a lot of that hard earned commission money to their customers, but if it creates the buzz, attention, and loyalty they hope for it will all be worth it.

So is this just another property market fad or could it be a lasting new trend in Thai property? Buyers and renters will hope for the latter, and we have a feeling things could really take off for Property Sumo and the concept of cashback rentals. We will certainly be watching them very closely over the next year, as I’m sure their competitors will be doing too!

To browse all the exclusive cashback properties for rent and sale in Bangkok, check out www.propertysumo.com

The Australia and New Zealand Banking Group Limited (ANZ) has been awarded a Thailand banking license, boosting its presence in the Greater Mekong region.

ANZ, in a press statement, said the granting of the license by Thailand’s Ministry of Finance marked a further milestone in its “super-regional strategy” with the regulatory approval.

ANZ Thai, it said, opened this week to support the growing trade and investment flows to and from Thailand.

Located in the Bangkok’s finance district, ANZ Thai will be an important addition to ANZ’s Asia network and its activities in the Greater Mekong region that already includes operations in Vietnam, Cambodia, Myanmar and Laos, the statement noted.

ANZ’s Chief Executive Officer of International and Institutional Banking, Andrew Géczy, said: “This is an important milestone and means we can now better connect our multinational customers to the growing trade and investment flows across Asia with the Greater Mekong.

“Thailand already accounts for almost 65 percent of Greater Mekong’s GDP and its trade with ASEAN countries totals around US$97 billion. Along with Thailand’s position as a key manufacturing hub for the region, these growing connections to its ASEAN neighbours and our home markets of Australia and New Zealand makes it an important market for our super regional franchise.”

Panadda Manoleehakul has been appointed to the position of Chief Executive Officer of ANZ Thai. Panadda has more than 25 years corporate and institutional banking experience and previously held the same position for ANZ Philippines.

Prior to joining ANZ in 2008, she held senior banking roles across Asia with HSBC, JP Morgan Chase, Chase Manhattan Bank and Standard Chartered Bank.

“Panadda built a strong, growing franchise for ANZ in The Philippines and has been instrumental in the process to gain our banking license in Thailand. I’m pleased ANZ will continue to benefit from her experience and leadership as she continues to drive our expansion into Thailand,” added Géczy.

Investing other people’s money must seem like a dream job, but there are significant risks and responsibilities involved. Get it right and you are a hero but get it wrong and someone’s life-long savings could disappear overnight.

For serious property investors it often pays to look at where these institutional investors are putting their cash. While the goals for these fund managers and individual property investors are quite different, you can gain some useful information regarding trends when you look at where millions of baht are being moved on a monthly basis. A snapshot of one month is good but a trend of movements into or away from specific companies is much more valuable to an investor.

Let us start by looking at the Franklin Templeton Investments Templeton Thailand Fund, with a value of US$182 million and close to a 20-year record. Although property companies have featured previously in their public list of top ten share holdings, Land and Houses was, at the end of May 2015, the largest property stock holding, and the largest overall, in the fund at 8.88 percent at that time. That was up slightly on the previous month.

Managed by emerging markets guru Dr. Mark Mobius the find aims to achieve long-term capital appreciation by investing primarily in equity securities of companies with their main business in the Kingdom.

Land and Houses was the only pure property developer to appear in the public list of 10 companies held by the fund at the end of April, with Kasikornbank and Siam Commercial Bank the second and third largest holdings.

In contrast the Aberdeen Thai Equity Dividend Fund, valued at the end of May 2015 at THB529 million and established since 2003, had no property companies listed within its top ten publically listed portfolio holdings. Instead, the focus of this find was on Siam Cement, Bangkok Insurance and PT Exploration and production as its top three equity holdings.

Finally, the Allianz Thailand Equity Fund that looks for capital growth over the long-term, and at the end of April had US$220 million invested in Thailand companies, had 7.13 percent of its portfolio in Minor International and 6.6 percent in Amata Corporation – the only two remotely property-related companies in its public top 10 list of holdings.

All of this fund portfolio information is available to members of the public, but use it with caution where investment decisions are made. Consider it part of your due diligence for your next property investment.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

High household leverage in both Thailand and Malaysia remains a source of risk for both economies, according to Fitch Ratings in its Asia-Pacific Banks Chart of the Month report.

Asset quality outlook is underpinned by the macroeconomic environments in the two countries, which are challenged by headwinds from China as the economy there slows and weighs on growth prospects across Asia, the respected firm said.

However, larger commercial banks (as opposed to state policy banks or non-bank institutions) in both jurisdictions appear better-placed to weather any asset quality stress. This is due to their better-quality customer bases and reasonable capital and asset quality buffers.

Household debt/GDP in Thailand and Malaysia remain among the highest in Southeast Asia at 86 percent and 88 percent respectively at the end of 2014, according to the ratings agents, and this is despite slower household credit growth in both countries over the past two years.

Thai household debt accelerated rapidly between 2010 and 2013 in particular, partly due to tax breaks on vehicle and housing purchases, while growth in Malaysia household debt has been driven by favourable credit conditions and strong consumer demand.

Growth in household lending has slowed more recently, to 6.5 percent for Thailand and 9.9 percent for Malaysia in 2014, from 18.0 percent and 13.9 percent respectively in 2012. In Malaysia, this has partly been due to successive regulatory measures to curb excessive household borrowing, particularly in personal unsecured loans and lower-income households.

Fitch said it viewed the slowdown in household debt growth as positive from a macroeconomic stability perspective, as it helps to contain an excessive build-up of debt. However, household leverage is likely to remain high in the short- to medium-term as consumer loan demand is unlikely to be materially below GDP growth for both economies.

Increased leverage makes households more sensitive to macroeconomic weakness, and this has already had an effect on delinquencies for some banks, especially in Thailand. Further asset quality deterioration is likely and will depend on the outlook for economic growth and unemployment, with lower-income households being more vulnerable in both Malaysia and Thailand.

However, Fitch sees the commercial banks, particularly the larger and more diversified institutions, as having satisfactory buffers to cope with the risks associated with high household debt.

In Malaysia’s case, moderate economic growth and broadly steady employment conditions are likely to continue to support asset quality in the near term, but high household debt could have potential negative implications over the medium term if macroeconomic conditions were to worsen significantly.

For Thailand, weaker economic growth, escalating delinquencies, and the exposure of some entities to vulnerable lower-income segments already contribute to a continued negative outlook for the sector, which could be exacerbated if the economy is very weak for a prolonged period.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg 

Luxury property developer Raimon Land recorded its 12th straight quarters of profit late last week, announcing net profits of THB313 million for Q1 2015 in a statement to the Stock Exchange of Thailand. It also announced it would be launching at least two new projects during 2015.

The company recognised revenue of THB1.63 billion in Q1, and as a result of its strong operating cash flow, the company’s interest-bearing debt, net of cash and cash equivalents, to equity ratio now stands at 0.7x, a reduction from 0.9x at the end of Q4 2014.

Johnson Tan, Chief Executive Officer and Board Director of the company (pictured), said: “Raimon Land continues to perform well under the current environment, as evidenced by our strong EBITDA and improving balance sheet.

“The management will continue to closely monitor industry fundamentals, source land plots to further augment the company’s backlog, and explore opportunities for alternative sources of income,” he added.

Raimon Land said it saw Q1 sales its completed properties reach more than 90 percent. For its properties under construction, Unixx South Pattaya has sold 64 percent with completion scheduled for Q4 2015, while in Bangkok The Lofts Ekkamai, has sold 85 percent with completion slated for Q4 2016.

The company noted that it has seen ongoing growth in sales to mainland Chinese buyers, and plans to unveil new marketing campaigns targeting both international buyers and Thais later in Q2, including roadshows and partnerships with leading banks.

It said that its sound deposit policy has ensured that transfer failure rates have remained below 1 percent.

The company has revealed plans for two new developments in H1 2015 that will serve to strengthen its position as a leader for high-end residential properties, it said in the statement.

Mews Yen Akat in the Sathorn central business district will offer nine unique homes and is the company’s first development in the ‘Limited Edition’. The official launch and construction will happen within the next three months.

The company also announced the purchase of a prime inner city plot of almost 2-rai near mass-transit connections and will begin pre-sales late this year.

“Raimon Land has spent the last two years focused on internal improvements as well as handover of two major developments,” said Tan.

“This year we will unveil new-to-market properties that will continue to build the company’s reputation as a leader in high-end real estate development.”

The company said that it has received substantial interest in both new developments, with advance registrations already ahead of expectations.

Raimon Land’s statement to the Stock Exchange of Thailand.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

PropertyGuru Group has announced a 39 percent quarter-on-quarter (q-o-q) increase in cash income for the three months ending March 2015. DDproperty.com is PropertyGuru Group’s market-leading Thailand property website.

The growth is further evidence of the company’s market leadership position through Southeast Asia, as the Group captured a record 92 percent of market share in Singapore and 59 percent in Thailand during Q1 2015, according to ComScore.

The growth in cash income comes despite what has been recognised as a general downward trend throughout most Southeast Asian property markets. For example, real-estate advertisement spend in Singapore during 2014 decreased 13 percent year-on-year (y-o-y) according to research by AC Nielsen. The decline was mainly at the expense of traditional media such as print and television.

PropertyGuru’s strong performance can be partly attributed to this shift from traditional to online advertising mediums. The main driver is its growing strength in the online segment for advertising itself.

In tandem to the Group’s market share growth across the region, combined Q1 visits in Singapore, Thailand, Indonesia, and Malaysia increased 28 percent y-o-y, reaching a record 11 million consumer visits and 104 million page views per month across the four markets. Each market delivered double-digit growth in visits.

Innovation: The prime driver of growth

Steve Melhuish, Chief Executive Officer and co-founder of PropertyGuru Group, said: “We believe that our commitment to continued innovation is the key driver and force behind our success.

“The Group has been revolutionising the property search experience, and we are now seeing these innovative solutions paying off.

“By providing better user experience to property seekers, they increasingly turn to PropertyGuru in each of our markets, and as a result we generated more than 500,000 leads for our advertisers each month across all markets; a double digit y-o-y increase.”

Last year was a big year of innovation for PropertyGuru Group as the company introduced eight products and enhancements.

“We are proud of our financial and traffic performances, as this clearly demonstrates our success and commitment to serve both our advertisers and property seekers,” said Melhuish.

“This year is quickly panning out to be yet another exciting year for us,” he concluded.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Thailand’s Finance Minister Sommai Phasi reported that a continuous slowdown in household debt is a positive sign suggesting that the Thai economy is on its way to recovery.

Government Spokesman Yongyut Mayalarp said the Minister had confirmed Thailand’s household debt growth had started to slow significantly since mid-2014. The current household debt growth was around 5 percent, compared with 18 percent in 2012.

The spokesman said the lower growth showed people were able to repay some of their debt, partly due to the government’s economic stimulus measures. The government’s recent assistance for indebted people has included the provision of nano finance as well as an easing of loan rules.

The government was confident that household debt would gradually decrease when the economy recovered, the spokesman added.

The Thai economy is expected to grow by 3.7 percent this year, significantly higher than last year’s growth of 0.7 percent.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

British buyers of overseas property have seen an immediate benefit from the election of the Conservatives to power last week that caused its currency, Pound Sterling, to bounce back against major overseas currencies.

“Homes in the Eurozone and the United States became immediately cheaper for UK buyers during Friday, as the City of London realised the Conservatives would gain power with a majority,” said Elaine Ferguson, Head of the Resource Centre at OverseasGuidesCompany.com.

“Speaking to people at an overseas property exhibition in London last weekend, where we received record levels of enquiries for buying property abroad, many people seemed reassured by the election result and were confident about proceeding with their property purchase – knowing the U.K. economy is in a position to maintain growth.

“The state of the property market affects practically anyone moving abroad and selling their U.K. home, so the continuing stability and ongoing house price growth that the new government should bring will benefit these people.”

Ferguson added: “Spain was attracting the highest number of enquiries from prospective buyers across all popular destinations during Q1 2015, and we saw a general uplift in the international property market compared with last year.

“The exchange rate was also a key topic of conversation at the exhibition, especially given how rates moved on Friday, and showed a growing awareness amongst buyers to send funds overseas in the most efficient way.”

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Home loan products were hotly sought-after at last weekend’s Money Expo 2015, where more than THB90 billion was generated according to organisers.

Speaking after the annual event Santi Viriyarungsarit, Chairman of the organising committee, said the event was a great success. He said more than 100,000 people had registered for financial and investment services from various institutions at the expo, creating cash flow of about THB90 billion.

Home loans attracted the highest number of customers, with the total value amounting to THB65.7 billion. This was followed by SME loans at THB16 billion, while other popular products included high-interest savings accounts, premium savings certificates and insurance.

Also available at the Money Expo this year were the THB500,000 banknotes in commemoration of the 50th anniversary of the Royal Wedding of their Majesties the King and Queen. Offered in pairs at the price of THB1 million each, the limited edition banknotes generated THB41 million baht in total.

Bangkok Bank has indicated that is it considering revising its projection for domestic economic growth this year.

In a statement to reporters, Executive Vice-President of Bangkok Bank, Kobsak Pootrakool, blamed high household debt and low agricultural prices for the sluggish economy.

He added the government may need to consider rebalancing the national currency by changing the exchange rate. The Thai baht has appreciated higher than other currencies in the region. However, the bank executive said the recently approved 2016 budget might help stimulate the local economy.

Meanwhile, KResearch Center Managing Director Chao Kengchon indicated that the Monetary Policy Committee is likely to leave the benchmark rate untouched at 2 percent.

He said that key factors for investors to monitor include the U.S. Federal Reserve’s decision on the benchmark rate. He believed the U.S. benchmark rate will also remain unchanged in the near term as the country continues its recovery.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

PropertyGuru Group has become the first property portal to integrate property and finance searching into one single platform with the launch of a suite of seven digital tools on its Singapore website.

These tools will provide property buyers and investors with a user-friendly and transparent way to navigate around home loans. DDproperty.com is PropertyGuru’s market-leading property website in Thailand.

These innovations include two comparison tools to determine the optimum loan and refinancing options, collectively known as the Mortgage Marketplace, and also affordability tools and reports for property-seekers to find out their maximum property affordability.

With the easy-to-use interface of the Mortgage Marketplace, property seekers can find their most suitable home loans quickly and accurately. Similarly, property owners who are currently servicing existing home loans are presented with a wide range of refinancing options – enabling them to compare and select the loan packages that offer the most savings.

The Mortgage Marketplace on www.propertyguru.com.sg is supported by a comprehensive listing of more than 100 home loan packages from 14 banks and financial institutions. It is accompanied by bite-sized property guides on key topics, such as prevailing government regulations and loan regulations.

Property buyers and investors no longer need to spend time browsing different websites for information on loans and regulatory terms such as Singapore Interbank Offered Rate (SIBOR), Additional Buyer’s Stamp Duty (ABSD) and TDSR.

Additionally, the Mortgage Marketplace increases transparency in home loan affordability by offering property seekers an option to compare home loan repayments in the first year, or over the first four years of the loan. This enables the property seeker to have full understanding of their loan repayment commitments beyond any introductory rates or promotional lock-in periods.

The suite of new tools includes an affordability calculator. The Affordability Calculator creates an Affordability report to help property seekers find the dream home based on their financial profile. It takes into account key home loan restrictions such as Loan-to-Value ratio (LTV), TDSR, Mortgage Service ratio (MSR), and cash downpayment limits to calculate the maximum value of the property a user can afford. Complimentary tools enable quick comparisons between mortgage payments when financing or refinancing home loans and provide detailed breakdowns of property seeker’s TDSR and MSR, and stamp duty commitments.

Lewis Ng, Managing Director Singapore, PropertyGuru, said: “We pride ourselves in being not only a first-mover in the property search scene but also a champion of consumer insight.

“With a single platform, Singapore property seekers now have a user-friendly way to access information to help them navigate complex property regulations like TDSR and MSR, and as well as the changing property prices and home loans.

“The concept of a mortgage marketplace was formed through our continued innovation to create tools that meet customers’ needs and empower them make better property decisions.

“Our strong position in the property search market and as a direct channel to property seekers won us the support of financial institutions in Singapore who have listed their loan information with us.

“We encourage property seekers to make full use of the Mortgage Marketplace and the other digital tools as they search for their dream home.”

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

As has been widely reported, Thailand’s Finance Ministry has proposed a new property tax on land and building owners. However, Prime Minister Prayut Chan-o-cha has decided to delay the new tax, citing concerns about weak economic growth and the bill’s impact on the poor.

Despite the Prime Minister’s latest decision announced last week, property owners should be aware of the proposed tax bill’s provisions so they can prepare for the eventuality the bill is passed. This article will discuss the proposed bill’s impact on a particular segment of property holders: owners of condominium units.

The proposed law represents a stark departure from the current law’s stance on property taxes. At present, the Local Maintenance Tax Act of 1965 governs property tax, under which the government collects a local maintenance tax from real estate owners. If an owner uses his or her property as a personal residence, then the local maintenance tax can be partially reduced or even eliminated, depending on the location and size of the property.

For example, if a person owns land in an area that is densely populated, such as in central Bangkok, he or she will only be obligated to pay local maintenance tax on that land if the area was more than 100 square wah. This tax is not enforced for condominium units that are used by their owners as personal residences.

However under the proposed new law, the government is seeking to increase the tax base to generate additional revenue, and therefore the proposed law provides for additional factors and considerations such as the value or area of a condominium unit to determine tax eligibility.

The value would be based on an assessment price set by the Treasury Department. According to information currently available, but still under review by Thailand’s Finance Ministry, if the area of a condominium unit exceeds 50 sqm, or its value is higher than THB1 million, the owner will be required to pay the new tax. With such criteria, a large percentage of condominium units in Bangkok would be subject to tax.

In addition, according to currently available information, if an owner of a condominium unit used his or her unit as a place of residence, the applicable tax rate will not exceed 0.1 percent of the unit’s assessed value.

If the same unit owner had a second condominium unit in Thailand with an area of more than 50 sqm, or a value that exceeds THB1 million, the applicable tax rate on such an additional unit would not be higher than 0.5 percent of its assessed value.

If the law takes effect, the proposed land and building taxes would apply to all condominium owners. Taxpayers would be required to pay the new tax by the end of April each year.

One potential consequence of such a law would be a reduction in the number of re-sales of condominium units. The Lands Department, upon notification by the relevant government entities, might attach “encumbrances” to a condominium unit if an owner did not pay the tax.

As the official transfer of a condominium unit must be registered at a local Lands Department office, the outstanding tax liability attached to the unit would hold up the transfer until the tax was paid.

Condominium owners would be able to challenge the tax assessments levied against them. Owners could do this by petitioning a local administrative executive to review the assessment. If the owner disagreed with the local administrative executive’s decision, an additional appeal could be made to an appeals committee.

Importantly, owners would still be responsible for paying the applicable taxes during the petition and appeal process. The only exception would be if the local administrative executive allowed the taxpayer not to pay the tax pending the appeal. If the taxpayer did not agree with the appeal committee’s decision, he or she could file a claim against the relevant government entity.

Whether the tax bill will be passed is uncertain. What is certain, however, is that current and prospective condominium owners should take note of how they may be affected if the law eventually comes into force.

This article was prepared by Kasamesunt Teerasitsathaporn, a partner in Tilleke & Gibbins’ dispute resolution and litigation department. Please send comments to Andrew Stoutley at andrew.s@tilleke.com. This article has been published with kind permission of the author and was first published by The Bangkok Post.

Thailand’s Finance Ministry has said it has yet to draw any final conclusions regarding the new property tax law, with clarity expected to be derived no sooner than July.

Finance Minister Sommai Phasee chaired a meeting of the tax reform committee on Wednesday in which several topics of discussion related to the property tax policy were raised, however no conclusion was reached.

The committee is set to convene at the end of April after further studies are conducted, and all the results are ready to be shared among all members.

Sommai said that once the final details of the property tax policy are ready, they will be passed to academics, educational institutions and related individuals and parties to review and exchange ideas.

He expects this process to be concluded within four months – after which he said all details will be submitted to the Cabinet for consideration.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

More than 100 property developers and contractors are set to undergo investigations following their alleged use of suspected forged tax invoices to decrease the amount of tax they were set to pay.

This follows the arrest of two unrelated gangs by the The Royal Thai Police and the Revenue Development for allegedly selling the fax documents, Prasong Poontaneat, the Director General of the Revenue Department told reporters.

He added that some developers had allegedly purchased false tax invoices with the aim of overstating their expenses in order to pay less tax than those abiding by the law and using only real invoices.

During the last 10 years legal action has been taken against users of more than 1,000 fake invoices, with some users sentenced to time in jail.

According to Thailand’s Tax Revenue Code, anyone found guilty of understating the amount of tax to be paid could be liable to a fine equal to twice the value of fake invoices. Prison sentences of three months to seven years and fines of between THB2,000 and THB200,000 can also be issued along with a maximum of a 20-year prison term.

Pol Lt Gen Prawut Thavornsiri, Assistant National Police Chief, added that developers using fake tax invoices were taking advantage of their industry peers and damaging the economy. He also said that developers submitting false tax invoices could offer higher discounts to homebuyers than their rivals in the same area.

The value of the alleged fake tax invoices has been reported to be worth as much as THB3 billion, however unused invoices also found could have escalated the potential loss to as much as THB10 billion.

Property prices in all sectors of the market throughout Thailand saw substantial year-on-year increases to the end of January 2015, although month-on-month declines in some sectors many be a cause for concern for developers in the landed and condominium sectors.

According to the most recent data from The Bank of Thailand all property sectors in Thailand grew year-on-year during the first month of the year.

The House Price Index produced by The Bank of Thailand and assessed by commercial bank mortgage loans, has been in place since January 2009 when a figure of 100 was given as the base mark for all categories.

In the first month of 2015, the prices on single detached homes, including land, rose by 4.4 percent year-on-year to stand at 118,1 points – which was actually a slight reduction from the previous month.

Town house prices, including land, saw a 5.9 percent year-on-year growth to reach 131.9 points. This, again, was a small reduction from the previous month.

Land prices rose by 8 percent year-on-year to reach 159.0 points in the Bank of Thailand Index, and this was a more than 3 percent rise from the previous month.

Prices of condominiums rose by 15.3 percent year-on-year, according to the Index, to stand at 164.1 points, although this was actually a 0.8 point reduction on December’s figure.

In making its calculations, the Bank of Thailand makes the following points.

The prices of Single detached houses including land, and town houses including land, as well as condominium price indices have been constructed by using hedonistic regression method (seasonally adjusted, 3-month moving average).

The Land price Index has been constructed by using mix adjustment method with fixed weight (seasonally adjusted, 3-month moving average).

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Thailand’s Finance Ministry committee has said it plans to review a draft law to introduce what will be the kingdom’s first tax on property next month. The proposals will then be submitted for public scrutiny, according to Finance Minister Sommai Phasee who spoke to reporters on Monday.

The Land and Building tax is seen to be a key part of the government’s plan to restructure taxes and broaden the tax base to help boost revenue and promote fairness throughout the country and all its people.

He told the media: “We will submit the first draft to the tax reform committee which will hold a meeting in April. After that we will invite academics, and the people to review it as much as they can.”

When approved by the cabinet, the draft property tax law is expected to come into force within in two years, and is expected to raise in excess of THB200 billion baht per year, according to figures from the Finance Ministry.

A draft proposal was expected to be submitted to the cabinet earlier in March, however Prime Minister Prayuth Chan-ocha delayed the submission for more work to be done on the proposals due to mounting criticism of the draft legislation, Reuters reported.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Current and future owners of overseas property in the United Kingdom will be watching today’s annual Budget statement – the last to be delivered by the current government – with interest.

Finance Minister George Osborne (pictured) will begin the statement at 12.30pm UK time, and he is likely to use to opportunity as a springboard for his Conservative Party’s pre-election campaign.

Increases in taxes paid by non-U.K. residents on their British homes is just one measure that has been predicted by many economic pundits in the run-up to today’s announcement.

Charles Purdy of SmartCurrencyExchange.com, said: “While a number of changes to pensions, capital gains tax for non-residents and tax rates are expected to be confirmed, any unanticipated changes to U.K. monetary policy could cause a knee-jerk reaction in the currency markets.”

This could have the effect of making U.K. property instantly cheaper or more expensive, depending how the markets react.

“However, the possibility of a new government coming to power in less than two months is arguably what will cause greater swings in the exchange rate in coming weeks, given a new party would probably reverse anything announced in the Budget,” he continued.

Purdy added that how the United Kingdom reacts to the Budget statement later today could be an indicator as to which way the election result might go, with an outright Tory government or Tory-led coalition ensuring continuity and therefore deemed a positive for sterling.

“Osborne will justify much of his Budget as key to completing his strategy for eradicating the deficit and keeping the U.K. economic recovery on track,” he concluded.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

The Bank of Thailand’s (BOT) Monetary Policy Committee has reduced the benchmark interest rate by 0.25 percent to 1.75 percent per annum in response to the weaker-than-expected recovery of the Thai economy.

BOT Assistant Governor for Monetary Policy Group Mathee Supapongse said on Wednesday the Monetary Policy Committee (MPC) voted 4 to 3 to cut the policy interest rate by 0.25 percent, effective immediately. The cut is in response to lagging consumption, investment and private sector confidence observed in quarter four of 2014 and in January of 2015.

According to Mathee, the four committee members who voted for the cut wanted to lower the benchmark rate to support the economic recovery and private sector confidence, while the three members who voted against considered the 2 percent per annum rate relaxed enough to promote economic recovery.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Wednesday’s policy rate cut makes Thailand’s benchmark rate the lowest in the ASEAN bloc.

For the fourth year running, JLL Asia Pacific has been named the top real estate investment advisory firm in the region, according to latest data from Real Capital Analytics (RCA).

The independent data and analytics company monitors global real estate transaction volumes.

In 2014, JLL’s capital markets team advised on US$16.1 billion of real estate investment transactions in Asia Pacific, which translates to a 26.4 percent regional market share.

Stuart Crow, Head of Asia Pacific Capital Markets at JLL, said: “The Asia Pacific region is growing rapidly and global investors continue to seek real estate assets to strengthen their investment portfolios. Demand for Asian real estate continues to be focused on the larger markets in the region and across a range of sectors, particularly those driven by the Asian consumer, and JLL ranked particularly well in the office and hotel sectors.

“This year is set to be equally successful with a very strong start to 2015 and I look forward to maintaining our leading position in the RCA rankings for the fifth consecutive year,” he added.

JLL has been ranked in overall first place in Asia Pacific since RCA began releasing data in 2011.

Romesh Navaratnarajah, Singapore Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg

Thailand’s proposed land and building tax will not be collected anytime soon, according to Prime Minister Prayut Chan-o-cha, because three more hearings on the law’s draft by the National Legislative Assembly are required. There will also be a long time lag before the taxation takes effect, he added.

According to General Prayut, it may be one or two years before the new taxes are collected. He explained the significant time requirement is due to deliberation into details of prices, urban planning, and other relevant matters. He added that he and state officials would be among those taxed under the new law.

The Prime Minister added the collection of land and building tax is required in order for the state to gain additional income to offset shortfalls in revenue collection from other sources, which were attributable to tax avoidance. He noted that avoided taxes will be recouped at a later time.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Bangkok Metropolitan Administration’s plans to build the BTS Bang Wa-Taling Chan extension route has gained approval by representatives from the civil sector and other agencies during the first round of a public hearing.

According to Deputy BMA Governor Amorn Kitchawengkul, the BMA will need to wait for the results of a feasibility study for the project. If it is deemed to be worth the investment, private operators may be interested in helping the BMA fund the construction, but if the study shows that the project is not lucrative enough but can bolster the capital city’s development, City Hall will undertake the project alone by seeking funding from other sources.

The Bang Wa-Taling Chan route is the third route extending from Silom area. The project is aimed at improving the mass transport system of highly-populated Thonburi area and alleviating traffic congestion in the capital city.

Bangkok’s Deputy Governor said Bangkok has to deal with more than 17 million trips per day, most of which are made by private car owners, leading to a traffic jam in many areas.

Construction is expected to start in 2017 and be completed in 2019. The new BTS route should be ready for service in 2020. The cost of the project is estimated at THB10 billion.

Most people attending the public hearing approved of the plan but called on the BMA to study investment feasibility of each section of the route carefully.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Thailand’s 4 percent predicted GDP growth this year ranks it in ninth place in a survey published by Bloomberg highlighting the 20 fastest growing economies around the world this year.

A total of 57 countries were surveyed, and China’s predicted 7 percent growth this year ranked it top of the list, with the Philippines and Kenya in second and third place respectively, and both with predicted GDP growth in excess of 6 percent this year.

Average GDP growth around the world during 2015 is predicted to grow at 3.2 percent according to Bloomberg.

Thailand’s ninth place ranks it behind ASEAN counterparts Indonesia and Malaysia but ahead of Singapore, which makes it onto the list in 20th position.

Emerging markets in Asia and Africa still reign supreme, according to Bloomberg and the analysts it spoke to.

The website reported: “They’re at the top of global growth projections over the next two years.”

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Real estate agency RE/MAX has partnered with GoCoin to accept digital currency for property rentals across the United Kingdom, and in doing so has become the first estate real estate agency in the U.K. to offer its clients and the possibility to make payments for property rentals through digital or cryptocurrency.

GoCoin is a global leader in Blockchain payments and the first platform for processing Bitcoin, Litecoin and Dogecoin at checkout.

GoCoin allows merchant operators to safely accept digital currencies without being exposed to their potential market volatility. Merchants can choose to keep the cryptocurrency, or convert all or part of it into traditional financial orders including US$, GBP, Euros and Singapore dollars.

“RE/MAX is taking an important first step toward embracing the full potential of the Blockchain for the real estate market,” said Steve Beauregard, co-founder and Chief Executive Officer of GoCoin.

“Lease payments are one area of focus, and we look forward to expanding into other areas of smart property as well,” he concluded.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Brazilian property developer Ritz-G5 now offers a Shariah-compliant investment in its Natal-based premium residential project, Majestic Village.

Shariah compliance is founded on the principle of “social justice” where companies are required to adhere to Islamic laws, which include prohibition of liquor, pork and vice, as well as fair and responsible trading practices. Malaysia leads the world in this form of investment product.

The Brazilian residential project is the first independent investment product to be eligible for Shariah-compliant funding. Previously, Islamic funds in Brazil have primarily been the domain of equity houses and banks, such as Banco do Brasil SA.

“Having explored the possibilities provided by this region for the last two years, this certificate marks an important milestone for us,” said Arun Rama, Managing Director of Ritz Property Investment Asia Pte Ltd.

“The regional Islamic finance market is very strong, and with our worldwide presence, our offering will enable us to tap a much larger funding pool.”

Islamic finance is gaining traction worldwide, and Shariah-compliant products have proven to be resilient even in volatile markets. Ratings agency Standard & Poor’s estimates that the global Islamic finance industry is worth about USD$1.8 trillion as at 2014, and is set to grow to as much as USD$3 trillion in the coming years, with Malaysia being one of the industry’s key drivers.

“The demand has indeed increased exponentially over the last few years,” said Professor Ashraf Mohd Hashim, Chief Executive Officer of ISRA Consultancy.

“(Shariah compliance) creates a unique portfolio offering for clients, allowing companies to expand in Southeast Asia, as well as the oil-rich Middle Eastern investors.”

The ICD Thomson Reuters Islamic Finance Development Indicator (IFDI), which measures the state of the Islamic finance industry globally, ranks Malaysia as its top market, valued at USD$166 billion in 2013, followed by Saudi Arabia (USD$36.4 billion), and the United Arab Emirates (USD$24.1 billion).

Professor Ashraf also added, “Countries wishing to pursue Islamic finance make-overs are looking to Malaysia as a model, as it is home to the world’s largest Muslim population.”

Established in Brazil in 2008, Ritz Property is an international development and investment company with offices in Natal, London and Singapore. Over the last five years, Ritz Property has been focusing its efforts in Rio Grande do Norte and its capital city Natal in Northeastern Brazil.

Image: Majestic Village is a 75-hectare serviced land plot condominium development in Parnamirim, an up- and-coming residential area in Natal. The project is designed to appeal to the domestic market and Brazil’s rising middle and upper class population of more than 90 million people.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Global property firm Savills has acquired a substantial stake in a well-established real estate business in Malaysia.

Currently trading as CBRE, the business will trade under the Savills brand name from March 1.

Owned by three seasoned real estate professionals – Christopher Boyd, Allan Soo and Paul Khong, it has close to 300 staff with offices in Kuala Lumpur, Penang and Johor.

The team provides a range of services to local and international clients, offering expertise in investment and capital markets, corporate real estate, retail consultancy, property and project management in addition to a strong consultancy and valuation business.

Commenting, Chris Marriott, Chief Executive Officer for Savills in South East Asia said: “We are very excited to be forming this new partnership in Malaysia, soon after our expansion into Indonesia, as this extends our already strong offering in the ASEAN region. Chris, Allan and Paul, who share a similar approach and principles to doing business, have built a very strong practice in Malaysia and I am delighted that Savills can now offer our services through their high quality, professional team.”

Marriott added: “With the upcoming establishment of the ASEAN Community (AEC) by 2015, I see cross border trade and investment growing in this region, with Savills being a major player in the continuing growth of the region’s real estate service industry.”

The merger sees the discontinuation of the business’ association with CBRE, although the Malaysia operations will continue to service long-standing joint appointments by agreement.

Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg

Foreigners may have to pay 30 percent tax on their future Taiwan property purchases as the country’s Ministry of Finance acts to prevent speculation in the market.

Taiwanese nationals will be subject to a 17 percent tax under a draft bill that will be introduced by Finance minister Chang Sheng-Ford after the Lunar New Year with the expectation of it being approved and implemented in 2016.

Premier Mao Chi-Kuo is reported to have approved the proposals but has called for greater flexibility, particularly regarding a clause that proposed the new tax rates would only apply to property acquired before June 1, 2011.

Local media reports suggest that proposals are being discussed that will exempt foreign owner-occupiers from the new regulations, as well as overseas buyers who hold their Taiwanese property long-term.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

The Thai government will discuss the taxation of both land and property at a cabinet meeting later this month or early in March.

The move, part of the government’s plans for tax reforms, involves the modification of existing customs and excise tax regulations as well as collection of inheritance tax and land and property taxes.

Thailand’s Ministry of Finance has expressed its confidence that this year’s economic growth will hit four percent as expected, saying that the government’s economic stimulus plans are beginning to take effect.

According to Ministry of Finance Permanent Secretary Rangsan Siworasat, the four percent economic growth forecast will be attributed to an increase in value-added tax to be collected this year thanks to a rise in public consumption and the investment-boosting strategies.

Although the amount of corporate income tax collected as of now is still below the target, Rangsan said the drop actually resulted from the government’s offer of tax cuts to business operators as part of the efforts to boost investment.

To expedite the economic expansion, the government this year will focus on development of infrastructure, establishment of special economic zones and issuance of tax and non-tax incentives for investors and small and medium-sized enterprises.

For the grassroots economy, the Ministry of Finance will launch a nano-finance project to offer low income earners access to funds which is expected to reduce their reliance on loan sharks.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Areas like the Indonesian island of Bali have already attracted a significant share of ultra-high net worth individuals, but the development of enclave regions around the Asia – from China to Indonesia, Malaysia, Vietnam and even Burma – will draw UHNW individuals to invest in property in these destinations.

Singapore remained one of the top cities for the world’s super rich to buy luxury residential property according to the recent Wealth-X and Sotheby’s International Realty Global Luxury Residential Real Estate Report 2015.

The city-state was ranked 7th on the list and was one of three cities in Asia-Pacific to place in the top 10. The other two were Hong Kong (in 3rd position) and Mumbai ( in 9th). The number one hub for UHNWIs to own prime real estate was New York, followed by London.

The report stated there 211,275 UHNWIs globally as of end-2014, up 6 percent from the year before. These are defined as individuals who have US$30 million or above in assets and are investing in property worth more than US$1 million.

“Singapore is a very attractive luxury real estate market with a thriving economy and international marketplace. We completed one of the largest residential transactions in Singapore in 2014. In addition to this robust local market, we manage referrals of Singapore buyers for many of our affiliates around the globe,” said Philip White, President and Chief Executive Officer, Sotheby’s International Realty.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Last week’s decision by the Australian Reserve Bank to trim interest rates by 25 basis points will provide some incentives for first homebuyers and investors in regional Australia, according to real estate group Raine & Horne.

“It’s great news that many of the banks have taken the decision to pass on the cut in full, and more in some cases. I’d urge those lenders still sitting on the fence to follow suit and pass on the rate cut pronto,” said Angus Raine, Executive Chairman and Chief Executive Officer of Raine & Horne.
Raine added that the rate cut is excellent news for regional real estate markets across the country.

“The rate cut will maintain the rage in our capital cities, and this will wash through to regional markets with robust economic fundamentals.”

The interest rate cut is expected to attract investor interest to Wellington, a regional town in New South Wales that benefits from its close proximity to major regional hubs, Dubbo, Mudgee, Parkes and Orange.

“This interest rate cut will be great for investors seeking decent yields, while it’ll be a boost for local first home buyers,” said Gary Francis, Sales Manager, Raine & Horne Wellington.

“New South Wales first home buyers have been stripped of many of their benefits in recent years, so this rate cut will encourage some to jump off the rental treadmill and into their own homes.”

Wellington’s affordability is another inducement for first homebuyers.

“It’s possible to pay under AUD$250,000 for a quality four bedroom house on decent size blocks in our town,” said Mr Francis, who recently listed 1 Riverview Avenue, Wellington for sale for AUD$239,000.

In regional Queensland, towns such as Toowoomba will boom as a consequence of the cut to official interest rates, and the news that many of the major banks have trimmed their variable rate home loans.

“It’s a really good move for our market, which was on the cusp of a surge anyway, thanks to a massive recent infrastructure injection in Toowoomba. The move by the RBA will simply turbocharge values,” said Andrew Lynch, Principal of Raine & Horne Toowoomba.

Lynch believes the spike in Toowoomba real estate will be led by investors.

“It’s possible to get a home loan rate of 4.23 percent now, and with yields of between 5 and 6 percent, an investment in a well-located, quality property in Toowoomba starts to make plenty of sense.”

Earlier this week, Raine & Horne Toowoomba listed three blocks of land in the Graceview Estate for between AUD$195,000 and AUD$210,000.

“The blocks are between 600 and 610 square metres in size, and they sold to out-of-town investors within 24-hours,” said Lynch.

“Interest from out-of-town investors is 30 percent stronger this week and I’d attribute this to the RBA decision and the fact that the Queensland election is over.”

In the South Australian regional town of Murray Bridge, the decision to cut rates will boost local real estate activity and values.

“This cut will be special as values have been a bit flat in Murray Bridge, even though prices have been improving in Adelaide,” said John De Michele, Principal of Raine & Horne Murray Bridge.

“We expect that investors will start to look at regional towns such as Murray Bridge where the median price is about AUD$250,000 and rental yields above 5 percent are achievable.
“Investors are realising they’re paying more in the city and will now go bush to get the benefit of this cut.”

Murray Bridge’s diverse economy, which includes irrigated horticulture and dairying, tourism, dry-land farming and intensive animal production, also underpins its vibrant property market.

“The good news for Murray Bridge keeps rolling, with Thomas Foods, a local meat processing firm, recently announcing 200 new jobs as the plant goes 24×7,” said De Michele.

“This will attract more transient contract workers who will need rental accommodation, which savvy investors will be sure to note.”

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg

Malaysian and Singaporean investors expressed more confidence to invest in Thailand after the situation in the country improved, according to Prime Minister’s Office Minister ML Panadda Diskul.

A group of Malaysian and Singaporean investors from CIMB last week met with the Minister and representatives of the Board of Investment of Thailand (BOI) at Government House to discuss Thailand’s economic and social issues.

Their trip was inspired by foreign investors’ increasing confidence in Thailand in terms of industry, transport and tourism, said the minister.

The investors asked for information about the BOI’s investment incentives and results of the studies on the government’s administration, politics, national reconciliation as well as corruption problems.

ML Panadda added that the investors said they were interested in special economic zones in Tak and Samui. The BOI representatives explained the government’s investment policy to them, stressing that investment in the special economic zones must support tourism in the areas, said the minister.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg