Crackdown dents condo purchases
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Crackdown dents condo purchases

Transfers to Myanmar nationals decline as junta blocks their ability to buy Thai units

Property buyers check out deals at the 45th House and Condo fair held in March at Queen Sirikit National Convention Center.
Property buyers check out deals at the 45th House and Condo fair held in March at Queen Sirikit National Convention Center.

Myanmar's crackdown on Thai condo purchases by its citizens could cause a significant decline in condo transfers during the second and third quarters, according to the Thai Condominium Association.

Prasert Taedullayasatit, president of the association, said Thai condo units worth more than 1 billion baht were blocked from transfers to buyers from Myanmar in April and May following the regime's crackdown.

"This will definitely have an impact on developers' condo transfers in the second and third quarters as the crackdown will cause difficulties for Myanmar customers, who are an emerging market among foreign buyers, in purchasing Thai condos," he said.

As the major Chinese segment slows, the Thai condo market cannot neglect Myanmar buyers as the number and value of their condo transfers have been consistently growing, unlike purchases by local buyers, said Mr Prasert.

According to the Real Estate Information Center (REIC), the higher number and value of condo transfers nationwide to Myanmar nationals began in 2022, rising from outside the top 10 to the top five nationalities with the highest number and value of condo transfers.

In 2022, buyers from Myanmar ranked sixth for units and third for value of transfers, buying 349 units worth 2.55 billion baht. Their ranking rose to fourth in 2023 with 564 units worth 3.7 billion baht.

The growth of the Myanmar market continued this year, rising to No.2 in the first quarter, buying 392 condo units worth 2.2 billion baht, outstripping the Russian market.

Of the total condo transfers to foreign buyers, Myanmar's proportion jumped from 3-4% in 2022-23 by both number and value, to 10% by number and 12% by value.

The Chinese have remained the top foreign buyer nationality since 2018, accounting for more than half by both number and value, with a share of 54-63% until 2022, according to the REIC.

Since then, as the Myanmar market picked up, the Chinese market share fell to less than half, dropping to 49% in 2022, 46-47% in 2023 and 41-42% in the first quarter of 2024.

"The Myanmar buyer market has been on the rise since the political turmoil in 2021," said Vichai Viratkapan, acting director-general of the REIC. "Recently some developers reported half of their condo transfers to foreigners were from Myanmar."

In Greater Bangkok, the most popular location among Myanmar buyers, the number and value of condo transfers soared year-on-year by 446% and 333% to 366 units worth 2.1 billion baht in the first quarter of 2024, marking the highest increase among foreigners.

In 2022 and 2023 this group bought 333 units worth 2.48 billion baht and 497 units worth 3.4 billion baht, respectively.

The surge in the first quarter of 2024 resulted in year-on-year growth of 10% for condo transfers to foreigners in Greater Bangkok, tallying 11.3 billion baht, compared with a 14% decline in total condo transfers, which includes Thais.

The proportion of condo transfers to foreigners grew to 36% for the period from 14% in the first quarter of 2023 and 25% for the entirety of last year, indicating a slowdown in demand among Thais, according to the REIC.

"Condo developers targeting Myanmar buyers should shift to holding expos in Thailand," Mr Prasert said. "The crackdown is shifting their condo purchases from completed to off-plan units as they need time to make money transfers via foreign exchange transactions."

Surachet Kongcheep, managing director of consultant Property DNA Co, said the rule would not affect those booking an off-plan unit or waiting for a transfer as they already planned their money transfers.

"It will impact off-plan buyers or new buyers who have not yet withdrawn the full amount to purchase Thai condos, or may have some remaining funds not yet paid to developers," he said.

These buyers may need to explore alternative methods or channels to withdraw the money, or failing that, negotiations or even cancellations may be necessary, said Mr Surachet.

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