Proposed Changes to Foreign Ownership Quotas in Condos Could Bolster Economy
Developers are advocating for an increase in foreign ownership quotas for condominiums in select regions to help stimulate economic growth. This comes after observing a sustained rise in demand from international buyers last year, a trend that is expected to persist.
Brenton Mauriello, the CEO of Raimon Land, a company listed on the Stock Exchange of Thailand (SET), suggests that the foreign ownership cap in condominiums should be raised from 49% to 60%. Mauriello believes that such a change would significantly benefit the economy without adversely impacting the nation.
Vichai Viratkapan, the acting director-general of the Real Estate Information Center (REIC), noted that in popular destinations like Phuket and Pattaya, foreign ownership quotas are maxed out in several projects. He emphasized that in areas less attractive to domestic buyers, increasing these quotas could vitalize local economies, as these markets heavily rely on international clientele.
In response to the high foreign demand, some projects, such as Laguna Lakelands in Phuket, have started offering leasehold contracts for certain units at prices 10-15% below those of freehold units. This pricing strategy mainly targets international buyers, reflecting the market's adaptation to demand trends.
Data from the REIC shows that in 2023, there were 14,449 condo units transferred to foreigners, valued at approximately 73.1 billion baht. These figures represent increases of 25% and 23.5%, respectively, compared to the previous year, and exceed pre-pandemic levels.
Vichai pointed out several factors contributing to this growth, including the positive effects of reopening borders in 2021, visa exemptions introduced for Chinese and Kazakh nationals, and ongoing global geopolitical tensions.
Chinese nationals were the leading group in condo purchases, accounting for 45.8% of total units and 46.7% of the total value transferred. They were followed by Russians, Americans, and Myanmar nationals. The most sought-after condos were priced at 3 million baht or less and ranged in size from 31 to 60 square meters.
Chon Buri emerged as the top region for condo transfers to foreigners, marking a historic first by accounting for 41.1% of the total nationwide, closely followed by Bangkok, which represented 38%. Together, these regions contributed to 85.4% of the total transaction value.
The share of condos transferred to foreigners nationwide in terms of both unit numbers and value rose to 13.4% and 24%, respectively, in 2023, up from 10.8% and 20.5% in 2022 and surpassing 2019's figures of 10.1% and 15.6%.
These statistics underscore a robust recovery in foreign demand for condos in Thailand, suggesting that the upward trend is likely to continue.
