Condo prices MAY go up even more

[Gary 4,119]

Seeing all the HUGE condominium complexes being built made me think. Is it possible that the builders are behind the government enforcing the existing laws regarding land ownership?

 

There are thousands of houses owned by farangs using bogus Thai companies. Pulling the rug out from under these guys would obviously increase the demand for condo units. I simply can't imagine the developers being able to sell all those units now being built. Look for the law requiring 51 percent of the units to be Thai owned changed.

[pfotoguy 3]

It's kind of scary. I would like to buy but this is not my country and I can't treat it as though it is.

 

In the US sure, you want to buy. It's an investment. but the laws can change here at any time on the goverments whim.

 

I just think it's safer to rent.

[WelshFarang 0]

I have heard it said many times that you should not invest in Thailand with money that you cannot afford to lose.

 

I believe that banks do not have any government underwriting should they go bankrupt. With all the corruption and Thais attitudes towards foreigners cash, I would sleep better at night in a rented accommodation.

[wacmedia 277]

I have heard it said many times that you should not invest in Thailand with money that you cannot afford to lose.

 

I believe that banks do not have any government underwriting should they go bankrupt. With all the corruption and Thais attitudes towards foreigners cash, I would sleep better at night in a rented accommodation

 

Hi,

 

Same,same. I love Thailand and the Thai's but I wouldn't put more than 10% of my assets there. The World is getting smaller everyday, why not invest somewhere with a solid legal and financial system ? A condo is OK but getting involved in complicated ways around the law in a country like LOS would not be for me.

[kdc1899 1]

I think the condo builders would actually prefer zero rules on foreignors owning property in LOS. If the thai govt enacted a free market property ownership structure the new condos would sell out in a week (no exaggeration).

I personnally would purchase as many Mekong River front acres I could afford; Tomorrow! And a couple of condos.

[donny 1]

I think the point is that revoking house ownership would force thousands of Farangs to sell at a huge market-glut discount, giving a bonus to the many Thais who feel they have been priced out of the property market by farangs but an even bigger bonus to the big land owners.

 

Many farangs would probably leave Thailand in disgust but I guess quite a few would stay and use the pittance earned from the rushed sale of their house to buy a condo.

 

It would damage Thailand's reputation and the economy in the long-term but I guess it could provide the sort of short-term surge in popularity that Thaksin needs right now. The sudden rush of transactions would also pump up revenues and create the illusion of growth, something the Thai economy might need now that the high Baht is hurting exports. Thaksin is going to need to juggle something to cling onto power and stay out of jail.

 

I could also imagine the property developers, sitting as they are upon a glut of condos, pushing for such a move. Again, bad for them in the long-term but they have more immediate worries.

[donny 1]

Wow, the situation actually seems to be more serious than we thought; this is from The Bangkok Post:

 

New property law stuns foreigners

 

Bangkok (dpa) - Thailand's booming property sector has been thrown into confusion by a new regulation issued this month that requires all partly foreign-owned companies to prove the source of their funding before purchasing land, industry sources said Tuesday.

 

The new Interior Ministry regulation that went into effect on May 25 has already started to slow sales of housing estates in Thailand's popular seaside resorts, such as Pattaya, Phuket, Hua Hin and Samui Island, which have been specifically targeting well-to-do foreigners as vacation getaways or retirement homes.

 

"The property boom ended on May 25," said Ronachai Krisadaolarn, managing director of Bangkok International Associates, a Bangkok-based legal consultancy firm that caters to foreign clients.

 

Thailand has strict laws prohibiting foreigners from directly purchasing property themselves although loopholes in the law allow them to own land and their houses through long leases or a "nominee company," providing the company is majority Thai-owned.

 

It is common practice for such "shell companies" to include Thai nationals who have been paid to act as nominees to facilitate the deal and who have invested nothing in the purchase.

 

The new regulation, signed by Suraart Thoingniramol, deputy permanent secretary of the Interior Ministry, is designed to halt the use of such companies for property purchases in the future.

 

"If it appears that an alien holds shares or is a director or it is reasonable to believe that a Thai holds shares as a representative of an alien, the officers shall investigate the income of Thais holding shares, delving into the number of years [they have spent] in the current profession and monthly salary," reads a translation of the law. "The provision of necessary evidence is required."

 

The new regulation is actually an enforcement of Thailand's existing laws, legal experts said.

 

"It's not a radical change. It's a radical implementation," Ronachai said.

 

The regulation has already started to stall home sales to foreigners, sources said.

 

"There's a lot of confusion," said Simon Landy, managing director of the Primo Co, a property-development firm. "Some land offices don't know what to do with it, and many have simply stopped transferring land."

Edited May 30, 2006 by donny

[pattayachip 0]

i kind of had the feeling that this was comming eventually,loopholes can be blocked,most homeowners that i personaaly know(5 people) are married to thais long time and have it in both names,so those people should be all set

now as far as condos,i would not be surprised to see down the road a 20%-30% farang ownership tax or something to that effect,there will be nothing we can do about it except pay or sell,afterall we can't vote anyone in or out of office and i dought your evearge thai will shed a tear for a farang...

[donny 1]

now as far as condos,i would not be surprised to see down the road a 20%-30% farang ownership tax or something to that effect,there will be nothing we can do about it except pay or sell,afterall we can't vote anyone in or out of office and i dought your evearge thai will shed a tear for a farang...

Well, actually, it wouldn't necessarily be a particular Thai or even "Thai vs Farang" thing, every country struggles with the problem of rising property prices leaving leaving local people or low-paid workers behind. In the UK, I believe there are extra taxes on homes bought as second/vacation homes. I think that first-time buyers, generally younger buyers struggling to get onto the property ladder, are given some sort of tax break too. Many people on lower incomes rent subsidised council housing and low-paid essential workers (nurses, fire-fighters etc) in extremely expensive areas such as London can sometimes buy cut-price apartments.

 

I expect that Thaksin will respond to from pressure from all sides, including Farang home-owners, by introducing a compromise allowing Farangs to transfer properties properly into their own names but also hit them with a hefty tax, supposedly designed to level the playing field between Farangs and Thais.

Edited May 30, 2006 by donny

[Owen` 2]

One way or another, this looks rather a lot like the party is over.

 

If someone is found to be owning property through a corporation deemed invalid, is this going to translate to government confiscation? The owner may want to sell, but all buyers know he has to sell within some time limit and . . . the buyers just cross their arms until that limit (confiscation date?) approaches while he cuts his price.

 

Personally, I don't see anything good to come from this unless the lawyers making a living off of setting up such corps. complain loudly.

[Rex7777 0]

Maybe the whole thing will result in a new set of laws for property ownership. I'd like to see 99 year leasholds available. I think they do that in Singapore.

 

I can't imagine they'll do nothing.

 

Rex

[RWB 0]

This doesn't surprise me at all. Several of our BM's have been predicting this for some time.

 

I got a hint of the Thai feeling a few months ago when chatting with a lady Thai on the net. She was very well ecucated, traveled, not young. She had mentioned several times in conversation about the "taking" of Thai land by farangs. I was not really sure what she meant at the time, but I believe I understand much more now. There is evidently much resentment about farangs being able to afford the homes and land that most Thais cannot even dream about.

 

I saw this same type situation in northern New Mexico when we had the influx of Califonicators in the late 80's and esp 90's. Many of the people were driven off their land by the rise in taxes when the developments went up. This was land that had been in family for sometimes over 100 years. There was and I think will always be much resentment against the 'gringo" in New Mexico, esp. Del Norte de Nuevo Mexico.

 

Where I lived was about 80% Hispanic, mostly Spanish Land Grant families, and that my friends is a whole 'nuther story.

 

I would be wary of even buying a condo at this time.

Edited June 1, 2006 by RWB

[spacebass 0]

The idea that this is the start of some kind of blanket vendetta against Farangs owning property in Thailand is clearly without any justification, and the result of wooly thinking by its proponents.

 

This is only the enforcement of a law that clearly states that Farangs are forbidden to own land in Thailand.

 

Farangs have been taking the piss and using farang legal logic to circumvent this clearly stated law. It is known as a loophole in the west.

 

Now the Thais have decided to close this loophole and why not? It illustrates the contempt the farang have for the Thai legal system (and Thai society?) more than any bad attitude Thais may or may not have towards farang.

 

On the other hand it is also very clearly stated in Thai law the Farang can own subject to certain criteria condo apartments.

 

As it is possible that Thai people (when you get beyond the Estate agent 'class') may have more logical thought process and greater respect for Thai law than their farang counterparts, demonstrated by the recent proper enforcement of clear existing law, the farang who owns their condo completely as per Thai law should have nothing whatsoever to fear from a government whose actions are driven only by existing clear laws, as the condo ownership law is.

[Gary 4,119]

As it now stands, only 49 percent of the condos in a complex can be owned by farangs. Many guys would be surprised at the large number of Thai people who own condo units. In the complex where I have my condo, Lalana, Soi Chaiyapruk Jomtien, less than 20 percent of the units are farang owned.

 

The more high profile complexes like View Talay have sold out the 49 percent farang units. Some guys have gone the company route to buy into the Thai share and may face the same problem as the home owners. Real estate people and lawyers have no problem setting up a company for you to own (?) property whether it is legal or not. If you decide to buy a condo in Thailand remember that if you can't have your name on the deed (chanote) that something is wrong. If there is a problem with a condo purchase the land office will NOT put your name on the chanote. When I bought my unit I had to have two checks. One for the bank holding the mortgage and another for the guy I bought it from.

[fopa 0]

A major bummer for me. I had just finally desided to retire in Pattaya. Although my retirement is still 4 years away I wanted to buy now and would have much preferred a house to a condo. Now I'll just have to sit and wait and hope the law changes in the next four years. It is very short sighted of the Thais to do this. They need the money alot more than we do, and foreign money bought into this economy can only be good for all of them. Oh well, I just may have to get married.....something I really didn't want to do.

[donny 1]

Do condos within the 49% farang allocation cost more than the Thai ones?

[Gary 4,119]

Do condos within the 49% farang allocation cost more than the Thai ones?

I think that's a reasonable deduction if the unit is in a complex that is at the 49 percent limit. It's not likely you would buy one that you can't have in your name although they will likely try to sell you one with a Thai company included. In the complexes that have not exceeded the 49 percent I doubt you will see much of a difference. Of course there are always people who like to think that a newbie is an easy mark. Rent first and look around. The ex-pats will tell you what is a reasonable buy and what is not.

[LukDod 0]

Do condos within the 49% farang allocation cost more than the Thai ones?

No, the prices will be the same....unless the farang has too much disposable income and is clueless doesn't _negotiate_!! Negotiation is a national sport in Thailand, as well as many other countries...and alien to many western cultures.

 

Some will use a Thai friend or GF to make the initial contact and get a price and

use that as a benchmark. Some do well by shopping around, comparing prices for similarly equipped condos in like locations (i.e. beach front, inland, etc).

 

Further, I'm of the opinion (worth nothing) that condo prices will not escalate due to the new restrictions on houses/land. I imagine that the current overbuilding and stronger Baht will cause just the opposite. Many realtors are indicating that the market is currently very slow...some say it is dead.

Edited June 1, 2006 by LukDod

[Gary 4,119]

Just two and a half years ago the most you would have expected to pay for a condo was 30,000 baht per square meter. Now we are seeing many priced at 100,000 baht per square meter for new construction. I for one would NEVER even consider paying that much. In a VERY nice complex I would NEVER go more than 50,000. Even 50,000 is too much. If you are careful and shop around you can still find some reasonable deals from individuals. I think it is much safer to buy a unit that has been lived in and all the other units are sold out. You are able to see who the neighbors are and well as how well the complex is maintained. If you buy pre-construction and the units are never sold out the maintenance will suffer perhaps to the point that you will never be able to live there.

[donny 1]

If you are careful and shop around you can still find some reasonable deals from individuals. I think it is much safer to buy a unit that has been lived in and all the other units are sold out.

My instinct would certainly be to buy second-hand. I'm curious about how Thai's reluctance to buy second-hand properties is going to affect farangs selling company-owned properties if other farangs aren't able to buy them because of this stricter interpretation. Could someone trying to sell an old place find that absolutely no-one is interested?

[mb3house 0]

In my opinion, this "law" enforcement has come about because too many Falang's are taking the piss and forming companies fraudulently, just so they can buy sections of land. They are then sub-dividing this land into smaller plots and re-selling at vastly inflated prices, hence you see all these houses crammed into such small spaces. Not only are they forming illegally, they are probably lucky they dont have the labpour department looking at them, as the vast majority are conducting business in Thailand without work permits. You can only take the piss for so long and get away with it.

 

I still think the individual, with his partner/wife will be allowed to form a company if they can prove they are buying land/house to live in it.

 

I dont subscribe to the fact that Thai's are jealous, they can buy land anywhere, and a lot cheaper than us.