CESA tackles foreign property stimulus

CESA tackles foreign property stimulus

Reopening for tourists advised

High-rise condominiums along Sukhumvit Road near the Asok intersection in Bangkok are popular with foreign buyers. (Photo by Patipat Janthong)
High-rise condominiums along Sukhumvit Road near the Asok intersection in Bangkok are popular with foreign buyers. (Photo by Patipat Janthong)

Property developers need new mechanisms to draw in the foreign market as the Center for Economic Situation Administration (CESA) is set to consider a stimulus package for this sector today.

There are two CESA agenda items focusing on the property sector: aid measures and a co-project with Thailand Elite Card to boost condo sales from foreign buyers.

Chanond Ruangkritya, president and chief executive of SET-listed Ananda Development, said Thailand should reopen to tourists at specific destinations such as Phuket and Samui, with a focus on markets with high potential such as China.

If the government can regain at least 20% of tourism revenue in those provinces, the property sector will also benefit.

Local residents should have the right to vote to determine whether they are ready to take risks in allowing tourists back in their provinces, Mr Chanond said.

The key point is the government should start doing something, he said. If the scheme proves successful, other regions can follow this path.

Phattarachai Taweewong, associate director at property consultant Colliers International Thailand, suggested the government extend the leasehold period for property ownership from the current 30 years to 50 years.

"Many neighbouring countries have tried to lure foreign buyers to boost their property sector," he said. "To be competitive, Thailand should extend its leasehold period."

In Vietnam, foreigners are allowed to lease lands for up to 50-70 years, which can then be renewed, while in Malaysia, foreigners can own 100% of the property.

Last year the Malaysian government also lowered the minimum threshold for high-rise residential buildings sold on the secondary market to foreigners from RM1 million to RM600,000.

"Most condo projects in several locations in Phuket and Pattaya already have the full foreigner quota," said Mr Phattarachai. "To boost sales from foreign buyers, developers need to offer them a leasehold contract."

Apart from Phuket and Pattaya, two locations in Bangkok where the foreign quota at condo projects is full include Asok-Rama IX, popular with Chinese as it is located near the embassy, and Sukhumvit Road along Phrom Phong, Thong Lo and Ekamai BTS stations.

"Leasehold period extensions should cover the long term as many foreigners remain unable to travel to Thailand," he said.

Ratchayud Nunthachotsophol, chief of business group for single detached houses at SET-listed developer AP Thailand, said the company is ready to market to foreign buyers if the government has a policy to promote ownership.

Locations where foreign buyers may be interested in single detached houses include Ekamai-Ram Intra and Sathu Pradit as both are near inner city locations and familiar to foreigners. The company has two projects in these areas.

Somchai Soongswang, president of Thailand Privilege Card (TPC), the operator of Thailand Elite Card, said the company is working on a plan to boost investments in Thailand from its 10,900 members and absorb the oversupply in the property market.

Some of the card's sales personnel work as real estate agents, so there is an opportunity to increase investment in property through this channel.

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