The majority of property buyers in Thailand today have a positive outlook on the market. There are lots of important factors that affect Thailand’s real estate market. Recently, there is less to no borrowing in the foreign property market in Thailand, which is good news for the market. As the significant changes in Thailand’s property market took place this 2019, it is expected that in 2020, the effects of these new rules will be felt in the first quarter.
Foreign investors came to buy Thailand property, hence increased in demand along with global money creation, which has driven the Thai property price higher. The higher prices are welcome for those who bought in the last decade.
This trend is forecasted to continue in 2020 and may affect other sectors negatively but not the property market, particularly in Thailand.
Inflation May Continue in 2020
Inflation may affect some sectors of the economy negatively, but not for house prices. The present worldwide economic phenomenon of money creation and the low-interest rates, in general, means more money is aiming at the same amount of goods is inflationary.
In 2008, where the US flooded the economy around the world with trillions of dollars, more money was produced, and it needs to be distributed. Most of it went to property markets and global stocks. Thailand was not part of the worldwide liquidity, but they were able to benefit from it.
Global Marketing is the Key Factor
Global marketing has affected the Thai property market and the main factor for the last few years. There has been a worldwide promotion for properties in Thailand.
The property market has received significant exposure to the international market, with condos and homes being marketed not only to locals and to overseas buyers as well. To promote the market extensively, they have set up offices worldwide like in London, Beijing, Shanghai, and Moscow and joins the international market to promote Thai property around the world.
Buyers from Europe and North America have been buying properties in Thai, even the neighboring countries like Singapore, China, and Hong Kong are buying properties in Thailand.
Foreign Property Ownership Rules
Foreigners are not allowed to purchase land in Thailand, but they can buy apartments and condo units. Also, in Thai policy, foreigners should not comprise over 40% of the total units. Foreigners can own the entire building, but they are not allowed to purchase the land where it is built.
Recently, Thai law has been modified and allow foreigners to explore the Thai property market more. They can avail of a 30-year lease, which they can renew and register at the Land Office and can renew their contract for another 30 years.
This modification in the lease arrangement has serious disadvantages. Lease renewables are not registrable. Also, the lessee has no right to resell, transfer, or sublease his property.
The expected economic growth rate in Thailand, according to the International Monetary Fund, is 3.0%. The slow pace could be the effects of the modifications on property law about foreign investors.