‘Welcoming’ Initiatives For Foreign Investors

Leading Thailand’s real estate service provider CB Richard Ellis is urging the country’s newly-elected democratic government to introduce “a more welcoming policy” for foreign property investors.

Thailand’s return to democracy following 15 months of military rule has already “sent a clear and positive message” to the property market, said David Simister, Chairman of CB Richard Ellis Thailand.

“We are seeing a significant number of deals closing during the high season in Phuket and more visitors to our sole agency projects,” he said.

As new Prime Minister Mr Samak Sundaravej and his People’s Power Party (PPP) cabinet draw-up policies for the new administration, he said: “CB Richard Ellis would now like to see government initiatives toward a more open and welcoming policy for foreign property investors.” The new government has already taken a step to remove the 30% capital control which is expected to help bring back foreign investments. The approval of the new tax incentive package is also an encouraging move for the property market. This is expected to lift market sentiments on both the demand and supply side. Property Transfer fee will be reduced from 2% to 0.01% and Specific Business Tax for property transactions will be reduced from 3% to 0.1%.
Confidence in the market could be further strengthened by longer lease terms, extending from the current 30 years to 90 years, he said.

“The government should also consider introducing business lending to foreign property investors,” said Mr. Simister.
“Such policies would allow Thailand to keep up with its emerging neighbours, Vietnam and Malaysia, in terms of property purchase terms.”

“Malaysia offers 99 year leases and under Decree 84, Vietnam now offers extended lease terms of 70 years.
“Policies such as these could play a significant role in bringing back confidence to the market as the incoming government focuses on returning the country to economic health and tackling its key issues.

“It is up to the new government to deliver clear and transparent policies to draw back investor confidence to the country.”

CB Richard Ellis is confident of a more positive outlook for the Thai property market this year than in 2007.
“The general election is not a miracle cure for Thailand’s problems but it puts the country on a path to recovery,” said Mr Simister.

Despite recent political setback, CB Richard Ellis noted the Bangkok luxury residential market still appreciated last year.

“High-end condominiums in prime CBD locations performed consistently well,” said Ms Aliwassa Pathnadabutr, Managing Director of CB Richard Ellis Thailand.

Record high prices were reached with the launch of Sukhothai Residences, fetching over THB 343,000 per square metre.

In Thailand resorts, land prices continue to rise in 2007 and transaction values picked up in Q4, 2007. Phuket is the most active resort property market in Thailand showing a 59% increase in transaction value q-o-q.
Since the December election interest from foreign investors has heightened.

“Established developments such as Trisara, Royal Phuket Marina, Laguna and Banyan Tree have seen a particularly active high season,” said Mr. Simister.

Newly launched projects such as Saisawan and Andara “have also been successful”.

A similar trend is reflected in Samui with “a clear uplift” in viewings and purchases of resort properties.
CB Richard Ellis expects further demand in Samui with increased flight schedules.

“The Samui market for luxury villas is catching up with Phuket, with the arrival of international hotel brands like W, Conrad, Four Seasons and Park Hyatt attracting quality tourism,” she said.

“Samui has traditionally been a low-key beach destination, but this is changing rapidly. Many high net worth investors are now interested.”

As the Treasury Department’s recent land value appraisal showed land values in Phuket have increased by an average 160 per cent over the past four years, with Samui prices following closely, Mr Simister added: “The continued increase in land prices on Thailand’s coast indicate the strength of the market and its long term prospects.

“The much anticipated general election has now taken place. It is up to the new government to deliver clear and transparent policies to draw back investors’ confidence to the country.”

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About the author

CB Richard Ellis CB Richard Ellis
CB Richard Ellis Thailand operates throughout Thailand and covers all aspects of Thai Real Estate from offices in Bangkok, Phuket, Pattaya, and Koh Samui.
Other posts by CB Richard Ellis ( 9 )
Website: http://www.cbre.co.th

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