Soaring Hong Kong prices put Bangkok on the radar
Looking for a condo in Bangkok has never been easier. Wealthy foreigner investors are converging into the Thai capital to purchase plush new developments such as 98 Wireless. These new projects offer services such as valet parking, dedicated butler service, chauffeured Bentley and Quintessentially concierge. Bangkok now offers a large choice of luxury condominiums, enticing fine dining and exclusive shopping.
Bangkok’s property prices have been projected to rise. CBREs March 2018 market report says developers “are competing fiercely for prime development sites, driving up prices to record levels, and both condominium prices and office rents are at record highs”.
Hong Kong investors are accustom with this situation as blazing property prices have given way to investors considering other locations such as Taiwan or Japan The estimated average price per square foot in Hong Kong is estimated to be KH$ 13,501 by Midland Realty (including Kowloon and new Territories). A 500 square-foot condo could cost up to HK$ 7 million when duties, moving and renovation costs are factored in.
During the first quarter 2018 the average price of a new Bangkok condominium was about 133,000 Thai Baht (HK$ 31,300) per square metre according to a Colliers Q1 2018 reports. This is based on around 14,050 new units launched during the first quarter.
A condominium with an equivalent size in Bangkok could cost HK$ 1.5 million, but prices are rising. The same report states that “the average price of condominiums in Bangkok has increased every quarter by around 3-5 per cent, depending on location, project concept and market position”.
Purchasing condominiums can be easy in Thailand. The law governing foreign ownership of condominium units is straightforward; foreigners may own up to 49 per cent of the total area of all condominium units in a condominium project.
It is estimated that only a small portion of the condominium buildings in Thailand has reached the maximum 49 percent foreign ownership. Therefore buyers have a vast opportunity to purchase condominium properties in Thailand
Foreigners can fully own property in condominium buildings with the same rights to title that Thai owners have. However, prospective property owner must have the cash ready to purchase.
The Condominium Act 1992, as amended in 2008, stipulates that a foreign individual wishing to purchase a condominium unit must remit foreign currency into Thailand in an amount not less than the unit’s purchase price. Buyers therefore have to transfer funds into the country to purchase condominium property.
At the time of transfer of ownership and the condominium unit is registered, proof of the remittance must be shown to the Land Department. The initial funds that were transferred into Thailand to make the purchase can be freely remitted out of the country when the property is sold. In addition any declared profit may be transferred.
Although most Thailand condominium projects are freehold, there are a few leasehold buildings in central Bangkok held under the Thai Civil & Commercial Code. If the leases are properly structured they can be fully transferrable and can protect the rights of heirs or can allow an option to purchase if the laws change, or if the buyer’s personal circumstances change.
Buyers should contact a complete title search of the title deed recorded at the Land Department and should be done before signing a reservation agreement or placing a deposit. The buyer needs to authenticate that the seller holds the legal title of the land. A title search will account for all previous legal owners and check for liens, leases or other mortgages on the property.
Buyers should also check on the developer and property construction to ensure the project is the quality that is expected. They are many local lawyers that specialize in this type of work and will check the project, their directors are and the developer’s performance history.
Analysts are projecting a conceivable oversupply in the marketing and prices may rely on the willingness of local Thais to make the purchases. Thais make up 75 percent of the buyers, according to the 2018
Thai purchasers will continue to dominate the Bangkok luxury condominium market. The report says, “The performance of the downtown luxury market will depend on Thai buyers’ willingness to pay the increasing prices.”