Ways sought to win back foreign buyers

We should promote sales to foreigners living here - Patima Jeerapaet Managing director, Colliers International Thailand

We should promote sales to foreigners living here - Patima Jeerapaet Managing director, Colliers International Thailand

Increased government scrutiny of land purchases by foreigners will hurt investment in all types of property, says Patima Jeerapaet, managing director of the property agency Colliers International Thailand.

The quiet property market in major tourist destinations such as Phuket, Samui, Hua Hin and Pattaya will get quieter if foreigners face more difficulty buying in Thailand, he said.

Meanwhile, he said, investigations by the Lands Department could cause foreign investors to hold back or place less importance on Thailand.

“This guideline announcement [dated Jan 22, 2009] will hurt not only the residential sector but also others like industrial estates,” he said.

“When the announcement was released, nothing could be done with it. I think we [government and private sector] should organise a roundtable and find an exit together.”

In his view, the announcement should not have been in the form of a guideline, as this might open a loophole for corruption. The issue should be resolved with practical regulations that impose the same standards on all officials.

He recommends setting up international economic zones where foreigners can buy condominiums beyond the 49% quota if they meet the government’s requirements. The leasehold period should also be extended from the current 30 years to 90 or 99 years, as in China and Vietnam, he said.

“We need to regain their confidence, which was lost after the April turbulence. Then we expected they might suspend their decisions for at least two quarters. Now it might take more than a year,” he said.

To stimulate foreign demand, the government should allow local banks to consider financial support to foreign buyers. Visas based on the amount that a foreigner invests in Thailand could be another incentive.

“We don’t need to promote [property purchase and investment] to new foreign residents who are unknown to us. Instead, we should promote sales to foreigners living here,” he said.

As the new chairman of the property committee of the Joint Foreign Chambers of Commerce in Thailand (JFCCT), Mr Patima will propose that the government take urgent measures to stimulate foreign demand in the property market, especially through tourism as it brings in real-estate purchases.

“Land ownership by foreigners is an urgent agenda item we are researching,” he said. “There are many models applicable to Thailand. We’re collecting the information and doing research to see what models are most feasible.”

The study covers international practices relating to property ownership by foreigners in Malaysia, Russia, Sweden, the United Kingdom and the United States. It will also examine the Japanese and Australian models.

“The most feasible model is that of the UK, as most of our laws are adapted from that country. The UK allows foreigners to buy property but we don’t need to copy everything. It might be limited to zones,” he said.

About the author

Kanana Katharangsiporn Kanana Katharangsiporn
Kanana Katharangsiporn is a senior journalist with The Bangkok Post, Thailand's first English language newspaper and specialises in property and real estate areas.
Other posts by Kanana Katharangsiporn ( 41 )
Website: http://www.bangkokpost.com/

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