Thailand Real Estate Information Center Suggests Increase in Foreign Condo Quota

An increase in foreign ownership quotas for condominiums from 49% to 70-80% should be allowed in specific locations and capped at units priced higher than 5 million baht to reserve supply priced lower than five million baht for Thais.

Vichai Viratkapan, acting director-general of the Real Estate Information Center, said foreign buyers in the condo market were interested in some areas, most of which were major provinces and tourist destinations. 

"Overall, the proportion of condos nationwide transferred to foreigners remained lower than 49% of total ownership, a legitimate level," he said. "But in some areas, foreign demand is so high that the legitimate level is not sufficient."

According to the centre, five provinces share the largest number of condos transferred to foreigners, accounting for 96.2% of the total number of units nationwide transferred to foreign buyers.

Meanwhile, the proportion of foreigners receiving condo transfers nationwide was 9% by unit number and 14.7% by value, compared with Thais at 91% and 85.3%, respectively.

The number of condos transferred to foreigners across the country during 2018-20 totalled 34,651 units, worth a combined 145.55 billion baht or an average 11,550 units worth 48.52 billion baht per annum.

The highest proportion was in Chon Buri with foreigners receiving transfers accounting for 30.3% of total in the province, followed by Chiang Mai (18.5%), Phuket (17%), Bangkok (7.8%) and Samut Prakan (6.3%).

By unit price, a total of 26,879 units or 77.6% of condos transferred to foreigners during 2018-20 were those priced lower than 5 million baht, however, this price range accounted for only 7.7% of total condos transferred.

At the same time, 22.4% of condos transferred to foreigners were priced higher than 5 million baht. This price range accounted for 20% of total condos transferred.

"The majority of condo purchases by foreigners were priced lower than 5 million baht a unit which was in the same bracket as the majority of local purchases. As supply in this segment remained large, so the proportion of foreign buyers was lower than 10%."

To reserve affordable condos for local buyers, an increase in foreign ownership quotas for condos to higher than 49% should be applied only in some locations and for units priced higher than 5 million baht, Mr Vichai suggested.

"If the increase is allowed, there should be protection for Thai owners in each condo juristic person, concerning living which matches Thai culture and norms," he said.

Mr Vichai suggested the protection could be done by limiting foreigners' voting right in juristic persons.

For low-rise houses or land for which foreign ownership is still not allowed, if there will be an allowance, unit prices should be 15 million baht and above to avoid clashing with Thai demand that saw 90% need low-rise houses priced 15 million baht and lower.

This also can help protect a quick rise in housing prices.

Like condos, a foreigner's voting right in a juristic person for a low-rise housing project should be limited at not higher than 49%.

Earlier in March, the government floated the idea of promoting Thailand as a second home by attracting foreigners to buy residential units under both freehold and leasehold contracts.

Source: Bangkok Post