Property rules could mimic Singapore
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Property rules could mimic Singapore

Call to keep homes affordable for Thais

The skytrain passes a condominium on Bang Na-Trat Road.
The skytrain passes a condominium on Bang Na-Trat Road.

The government should ensure Thais can afford homes and should limit the areas for extending foreign ownership of condos to specific zones, even within a single province, to avoid opposition, says a property research firm.

Vichai Viratkapan, acting director-general of the Real Estate Information Center, said the Thai government might adopt measures similar to Singapore, which underlines home affordability for its citizens.

"Even though the city-state is small, Singaporeans welcome foreigners because their government has implemented several policies and measures to ensure they can afford homes. They've never been afraid of foreign property ownership," he said.

Some of the policies and measures include public housing development with units sold at subsidised prices for a broad segment of the population.

Singapore has a Central Provident Fund with contributions collected from both employees and employers, which can be used to pay for down payments and monthly mortgage instalments.

The nation also has various housing grants and subsidies to make housing more affordable for different groups of citizens, providing financial assistance for lower and middle-income families to help them purchase their first home.

To prevent speculative buying and to ensure housing remains affordable, Singapore uses cooling measures such as stamp duties for multiple property owners and foreigners, as well as tightening loan-to-value limits.

"Singaporeans are not worried about owning a home, but they are concerned about long queues," said Mr Vichai. "While allowing foreigners to buy units, they limit each nationality to a certain percentage to prevent domination."

Some property analysts said this approach might not work for Thailand because the country has a vast amount of land for condo development, allowing foreigners from different countries to spread out and not necessarily live together.

To address concerns about home affordability for Thais if the foreign ownership quota for condos is extended to 75%, property associations suggested allowing the extension only in certain zones, such as districts in Bangkok, Phuket and Pattaya. Revenue generated from taxes or fees collected from foreign buyers at condo projects with enlarged quotas should be put into a housing fund, said the groups, which can help low and middle-income Thais to borrow mortgages with interest rates of 0% for the first three years, serving as a guarantee for the loan.

"Increasing purchasing power from foreign buyers might be necessary amid weak demand from local buyers, but affordability for Thais must be taken into account," said Mr Vichai.

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