Thai real estate investments: prospects and disadvantages

In modern world there are not so many real estate markets that are friendly to foreign investments. Thailand is described as developing country, but most of experts are not so sure about this statement. The country has stable economic system, clear tax regulations and advantageous political situation. The status of “developing country” forces the government to give investors a lot of privileges, which could be used for achieving of extremely high profits.

Neighbor countries had already got a lot of investments in real estate, Singapore and Hong Kong continue to urbanize, Philippines has considered itself as one of the strongest states in the region with stable economic growth, but what about Thailand? We made a small research to give you a clear and honest view over the situation.

Growth, growth is everywhere

Thailand is flourishing and hard-working nation. It has shown reliable economic growth for last 20 years. But is this enough to attract your investments in real estate sector? Does this country have something more to offer to its investors? Of course, it has.

  • Resilience is the cornerstone of Thai economy. The area of real estate has been through several critical situations, most of which were cause by unpredictable political issues such as death of the King, who was loved by the nation and played the role of stabilizer in every confrontation. Some not so far-sighted experts predicted the collapse of real estate market, but they were completely wrong. All the disasters made Thailand stronger, and today almost nobody doubts in continuation of reliable growth.
  • Investors should like ultimate ability to bounce back. If we are talking about the South-East Asia, Thailand was the country that was damaged by financial crisis in 2009 the most. In the same time, government managed to bring economic back in several years without any damage to real estate sector or foreign investors at all.
  • Thai real estate is one of the most reliably growing markets in the world. Prices show continued growth year on year, across all sectors of the market: condominiums have posted between five and twelve percent annual price growth every year since 2008, with no sign of slowing down. Even luxury properties, (above ten million baht) a previously sluggish segment of the market, are showing growth (and attracting foreign investment dollars) for the first time since 2013.
  • After two years in which no new Phuket luxury properties became available, 53 new properties went on the market in 2015. And that still pales in comparison to Bangkok, where nearly 1,000 new luxury units are available for purchase. At any investment level, Thai real estate can be relied on to keep up a steady price increase.
  • Infrastructure growth has slowed a bit, but ambitious project called “South Asian Rail” is here to change the situation. It is the transport system that connects several countries and make transit of any kind of product slightly faster. Not SAR is still looking for investors in the sector of real estate. Easiness of transportation means infrastructure growth, that is bounded with a lot of job vacancies. All people that will be involved in project will look for a place to live, so if you will invest now, you are likely to get huge profits in several years.

Is it always sunny in Thailand?

There is no perfect market in whole world and, unfortunately, Thailand is not an exception. The sector of real estate is loosely regulated, which may be described as both pro and con for the investors. The development rate remains high, but you should pay a lot of attention to long-term perspectives.

  • There a lot of restrictions for foreigner that would like to buy real estate in Thailand. Despite the unregulation of this market zone, government aimed on its citizens, so locals got a lot of advantages among the investors.
  • Condos are the most widespread type of the real estate that available for foreigners. They are pretty cheap and profitable, but you should remember about the law which quotes 50% of condos among the country for natives. It means that in some cases you will not be able to buy it as fast as you wanted to.
  • The level of competition in the Thai real estate market is extremely high. The people who invested in this sector 10 or 20 years ago have a great advantage among the newcomers, but still, purchasing of a flat or luxury property is great long-term investment.
  • High activity areas are not forbidden for the foreigners, but your investment here has no prospects because of locals that may offer citizens cheaper rooms because of special tax terms.

As far as you can see, the number of advantages is bigger, but you should discover the target region forehead. According to predictions, Thailand will remain sustainable country for real estate investment for next four decades, so do not miss your chance!

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