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PROPERTY REPORT :

Housing prices are forecast to rise by at least 4% starting in April after the government announced the end to a package of tax incentives for homebuyers.

Cabinet ministers yesterday declined to extend tax breaks set to expire on March 28, which include temporary cuts in transfer fees to 0.01% from 2%, in mortgage fees to 0.01% from 1% and in special business tax to 0.1% from 3.3%.

 

Land purchase through Thai spouse forbidden: Land Dept

The government in August is looking into beach properties bought under Thai names (via marriage) with foreigners in Phuket, Samui and Pattaya as at August 2009

The director general of the Land Department has reiterated that foreigners using Thai nominees to buy land anywhere in the country will have their land title deeds revoked if caught – even if the nominee in question is a lawfully wedded spouse.Land Department Director Anuwat Meteewiboonwut made the comments during a recent stop in Phuket as part of a nationwide inspection tour of 30 provinces.The tour is aimed at improving public services by land officials in three areas: dress, conduct when dealing with the public and working harder to eliminate a backlog of work.Many members of the public have complained that it takes up to a year to complete a transaction that should only take one day, he said.Mr Anuwat, a former governor of both Phang Nga and Samut Prakan provinces, said he was satisfied on the first two points, but rated the general level of success among land officials nationwide at speeding up their work rate at “only 30%”.The next round of inspection tours will come in July, after which time personnel changes will be considered if service does not improve, he said.

“We have to keep pressure on them, otherwise the work will not get done,” he said.As for foreigners seeking to buy homes in Phuket, they can do so through the Condominium Act, which allows foreign ownership of up to 49% of any project, he said.Foreigners cannot use a Thai spouse as a nominee to buy property in Thailand, however. “If the Thai spouse has enough money to buy the house that is fine, but if the Thai has no money and uses money given to him or her by a foreigner to acquire property, that is against the law. If we check and find out later that a Thai person has been using money from a foreigner to buy land anywhere in Thailand, we will revoke title deeds,” he said.Mr Anuwat said the provisions of [Ministry of Interior] ministerial order 43 makes it difficult to issue land documents quickly, as it requires action from a number of different agencies. Desire for land on the island has also led to encroachment problems here, he said.As a key market for property companies, Phuket is a constant source of problems and complaints to the director general’s office, he admitted. “We will try to resolve these problems and develop our personnel continuously in order to provide high quality services. Fortunately the governor of Phuket used to work in the Land Department, so he understands the procedures and can help co-ordinate all the agencies involved,” he said.Mr Anuwat was speaking of Phuket Governor Wichai Phraisa-ngop, who served as Land Office director in Nakhon Pathom in 1997 and as deputy director of the Land Department nationwide in 2003.-- Phuket Gazette 2009-05-27

Bkk Post readers say this: Between the seizure of land and houses belonging to foreign and public flagrant denunciation according to Phuket Gazette articles, we will have to be more clever to survive in Thailand because witch-hunting game is open by these times of lean incomes.The expats who have put their shares of ownership of houses, lands, boats or companies in Thailand in the names of their Thai spouses, Thai nominees or Thai partners (lawyers, accounting offices, friends, etc ...) will have a lot of concern if the Thai administration decides to strengthen the existing laws in favor of Thai people following complaints from unscrupulous Thai opportunist investors who would like to acquire those foreign assets without too much effort.In Thailand, it looks like cheating and dispossessing defenseless expats before the law, is not considered as a sin by most Thais and it may become a national sport in a near future. The way around it all: you bring the money and give to your wifes parents --they then gift it to the son or daughter who buys the land or house etc? or you give all before you marry to your partner & she banks it. After you marry then she buys the house in her name but then you lose out if a divorce occurs.

May 2009 Report

Thailand FOR FOREIGNERS is the still the better options for those on pensions and have the means of income to live. It is much better than the Philippines or Indonesia and offers more for the retirees than any other country. Property wise there are bargains in the classified sections but not with realties as many of these companies esepcially the fly by nighters and foreigners who set up go by the way side. In Pattaya a few realty companies are closed or near closing and one must use a good lawyer now to be safe from scams etc. But forget that as there are good properties on the market.

The Government Housing Bank (GH Bank) reported 1.095 billion baht in net profit in the first quarter after allocating 1.243 billion baht in reserves for doubtful accounts, according to president Khan Prachuabmoh. The bank extended 22.5 billion baht worth of housing loans to 33,581 customers during the period and expected total new loans of 73.5 billion baht this year.It had non-performing loans of 63.32 billion baht in the quarter accounted for 10.51% of total outstanding credit. The bank had 9.78 billion baht in non-performing assets (NPAs), down 3.87% year-on-year. It sold 390 million baht worth of NPAs in the first quarter and plans to hold three more auctions this year at branches nationwide. In its latest auction last Saturday, GH Bank sold 505 NPAs worth around 300 million baht.

New investment in Thailand this year will come mainly from local investors as foreigners might focus on their current holdings and on their home countries, according to the international real estate firm Jones Lang LaSalle (JLL). "In the past three to four years, many property developers had turned to invest in condominiums rather than office buildings which slowed the growth in office supply. It's a tenants' market this year," she said. At the end of 2008, there were 7.71 million square metres of office rental space in Bangkok, 86% of which were occupied. New rentable areas this year will total 216,000 sq m. About 400,000 sq m of new supply, a 5% increase in space, are expected to enter the market in the next four years.

Hemaraj Land and Development Plc (HEMRAJ), Thailand's largest private industrial land developer, expects its 2009 land sales to slump by two-thirds of last year's figure, says president and CEO David Nardone. Hemaraj sold 1,621 rai of industrial land in 2008, but this year the company is targeting only 500 rai, because of the global downturn's impact on investment and industrial-land demand.

Serviced apartments gaining edge over hotelsThe recession has driven business travellers to shift from five-star hotels to serviced apartments that charge less and provide more facilities. The Thai Hotels Association (THA) recently reported that average occupancy of Bangkok hotels was around 30% and as low as 5-10% at some properties after the red-shirt political riots during the Songkran festival. During the 1997-98 economic crisis, serviced apartments suffered as travellers took advantage of cheap hotel rates resulting from the baht's depreciation. Many financial professionals who had used serviced apartments left Thailand as businesses collapsed. Today, both leisure and business travellers are looking to save money on accommodation and serviced apartments meet their need.

 

WHEN TO PAY FOR YOUR PROPERTY

1/. Never pay deposit or booking fee over the Internet. See what you buy first

2/. Look at progress payment reports when, & how much

3/. Check the builder before you sign

4/. Talk to neighbours & others about the Moo Baan or buildings.

5/. Have a person on site to inspect interim work for you

6/. Do not be bullied into progress payments before work completed. If so then some middle man is getting his cut.

7/. When in doubt ask. Seek advice

   

 

PLENTY OF BARGAINS ARE THERE TO BE HAD IN THE CONDO MARKET
Bangkok Post May 17, 2009

Among other opportunities are properties held by cash-strapped foreigners looking to bail out on their investments. Thailand's lingering political problems have led to a significant slowdown of new and second-hand condominiums, but prices have not dipped substantially, says James Pitchon, executive director of CB Richard Ellis (CBRE). The discounts offered by those eager to exit the market are between 10% and 15% below the market's perceived average price - or what buyers think a building is worth versus what developers say it is. By contrast, condo prices in Singapore and Hong Kong are down 30%. New launches are down, of course, given the poor economy, particularly in the luxury condominium sector, with the supply of completed freehold condominium in downtown Bangkok standing at about 55,000 units. Mr Pitchon says the slowdown is healthy for the market given the present demand. However, he warns that 2009 is really a stress test for condos, because as many as 11,000 to 12,000 units that were begun two or three years ago are being completed within this year. "When it comes to transfer of title we'll find out if the original buyers were speculators, end-users or investors." Interestingly, despite the Songkran unrest, CBRE concluded transactions within the luxury segment in which it specialises both during Songkran week and the week after. The turmoil in fact turned into a catalyst for people who were thinking about getting their money back. Although there were buyers and sellers prior to the unrest, the gap between them was often too wide. Right now, if a unit owner is willing to offer a 10-15% discount he should be able to attract buyers.

"We have seen foreigners who bought off-plan wanting to resell and willing to discount to their purchase price or, in a limited number of cases, to below their purchase price," says Mr Pitchon. Thai buyers, he says, certainly see these discounts as an opportunity. "I think this will probably be a continuing trend - foreigners wanting to exit the market, particularly those who are speculating. They need the money - a lot of people's investment portfolios are down. "There is a view that that prices are not going to rise, so their choice is to get out,but to transfer title means paying the full remaining 70% of the purchase price. There is no financing for that for foreigners."

However, CBRE is seeing a very different attitude among Thai buyers. Thais are currently receiving almost zero interest on bank accounts and there are very few alternative investments within the country. More importantly, most of the money in Thailand stays within Thailand, with very little capital flight. "So the options are you can keep it in the bank, put it in the stock market or other financial instrument, or put it in property. And right now with deposit rates close to zero, even a yield of 3-5% is better than receiving nothing in the bank account."
Also helping the property market is a real worry in the world that inflation might start to head up as the economy recovers. Although the effect of the global financial crisis is deflationary, there are those who believe that there is a danger that the amount of money being thrown into the financial system may result in inflation. This view is mostly held among older investors who remember the 1970s. "To build new will cost more in an inflationary environment, and property is still seen as a hedge against inflation provided you are not buying into a bubble market," says Mr Pitchon. "CB Richard Ellis does not believe that Thailand is in a bubble market," he added.

A good example of a bubble market is London, where property prices in Kensington and Chelsea increased by 450% from 1995 to 2007-08, and since then have dropped by 10-15%. However, in Bangkok in many cases projects that are 10 years old have not even seen a doubling of prices. While the prices of new buildings and units have increased, this usually reflects better quality, as many units now come fitted with floor covering, kitchens and air-conditioning and are not bare shells as in 1995-97. But with so many new units nearing completion, some developers could come under pressure to discount prices of their unsold inventory when they complete their buildings. "But each developer will make their own decision. Whether to try and hold, whether to reduce pricing, hold and rent it would depend on the developers and their relationship with the banks. There is pressure from developers' inventories, but we don't know what the outcome is going to be yet." Aside from this, Mr Pitchon pointed to speculators who baulk at completing transactions when they see that prices are not rising. Some foreign speculators have shown willingness to settle for getting some of the downpayment back, and the buyers clearly benefit because they would be able to purchase units just prior to completion at the prices of two to three years ago. "This will not happen at every building," cautions Mr Pitchon. "It will depend on the level of speculative buying or pressure on the developer to sell inventory." However, this pressure is still unlikely to lead to a significant drop of prices in better-quality building, as it would apply only to the few units that have to be resold or sold at discounts by a developer because of the circumstances he faces.

IT'S NOT ALL DOOM AND GLOOM
Bangkok Post May 3, 2009

The current financil crisis presents some very different challenges to the problems faced in 1997. The fear that non-performing loans (NPLs) could rise this year has turned into reality since February, which means small and medium-sized property players will have greater difficulty in staying afloat, says Thanapol Sirithanachai, managing director of Univentures.
Distressed assets too would rise as NPLs pile up. Mr Thanapol says Bank of Thailand data shows that NPLs within the whole system were 5.6% of total loans at year-end 2008, but rose to 5.9% in February. For the property industry, this means smaller operators could be snowed under with more problems as they fail to reach sales and price targets, while having difficulty in drawing down loans as banks are much stricter now and have imposed more conditions. "But at the same time we can see that big companies - the top five - can move ahead this year because the situation is not like 1997, listed companies and big operators today not only have low debt levels, they hold cash too so they will be able to implement projects." However, Mr Thanapol warned that sales will slow down with this squeezing of margins, also indicating that NPLs could climb even in the property industry. But banks and financial institutions are already aware of this difficulty and seem to be taking better care of their clients. These troubles also mean there will be fewer new property projects this year but this is, in fact, a blessing in disguise because it matches decreased demand. Mr Thanapol expects there to be a few more ghost buildings joining those from the 1997 era that still dot the Bangkok skyline, but the total will be fewer than the Asian financial meltdown left behind.

"I think it will differ from that period because there will be fewer instances of construction halting after a project has started. But the scenario of projects being scrapped after sales fail to pick up - if we look around there are projects that were introduced for a while and when they failed to make it their executives returned the money to the clients and shelved them." Mr Thanapol, whose company has experience in handling distressed assets, fears that it will be much more difficult to resolve these problems today than in 1997-98 because the lightning speed and deadly impact of the Asian meltdown caused the whole system to halt at that time.

This led to speedy foreclosures and when a company such as Univentures moved in to acquire a suspended project. it only had to hold talks with one party - the bank. When negotiations ended, the projects were able to resume construction and continue.However, such a move today means having to deal with several parties, with the banks too now in a stronger position so they no longer have to accept a debt write-down or "haircut". Aside from the banks, any acquisition entails dealing with contractors because the construction would probably still be continuing, the buyers who would also debate whether to pull out or continue, there would also be host of suppliers and on top of this there are a whole lot of regulations to wade through.


OPPORTUNITIES: Thanapol Sirithanachai is confident.

It is clear that prices have already begun sliding, but developers disguise this by packaging them as promotional giveaways, but they do really mean a discount. A drop of five to 10% is already apparent in the market and it could sink further. "I think demand is still tangible in some locations, but buyers are waiting to see whether the price offered is acceptable. Right now, when it comes to marketing, most operators are stressing the price as the key point because consumers are looking at this," says Mr Thanapol.

In the residential segment, the impact is most visible in the condominium market because the supply increased substantially in recent years but is expected to drop because fewer condos will now be built because these tie up large sums of money. "But there is demand for condominiums at the one to three million baht level because when people run into such problems they tend to opt to live in condos and use the mass transit systems." The strongest impact will be felt by projects catering to people on low-incomes because of the heavy impact this round of financial woes is having on the industrial sector. The luxury end is also slowing because some of the buyers have been foreigners, or Thais buying units to rent to the foreigners. With the whole world facing a severe economic crisis, Mr Thanapol urged the authorities to consider winning the hearts of foreign investors by allowing 100% foreign ownership of condominium buildings in certain areas such as Pattaya, Phuket and Samui for a certain period after which the regulation could be scrapped. Also, with foreigners generally not allowed to buy land and only permitted leaseholds which are now only up to 30 years under legal guarantee, with further extensions being contractual obligations, Mr Thanapol feels this too could be extended. While it might seem that Thailand is in greater difficulty than some other countries because it is coping with the twin economic and political problems with this year's GDP also expected to be in the minus territory, in fact other nations that are only coping with tough economic conditions, but without political instability, are worse off, Singapore being a good example. "Their economy depends on exports but ours ... we still have a basic economy so we are not that badly off." However, if political issues continue to trouble Thailand then it will sap demand even further. "I think the most important thing is the impact on confidence. We could have demand, but if there is no confidence to spend then everything will stall. Although people have savings and money in their pockets, the impact of lay-offs means although they could still cope they will slow down spending." Even so, Mr Thanapol said the reverse side of every crisis is opportunity, and people looking to buy a home to live in will this year see prices they have never dreamed of before and will likely settle for a good offer. Investors and business operators too will get opportunities to buy projects to develop further.

.LAND AREAS: 1 rai = 4 ngarn = 400 wah2 = 1600 m2; 1 talang wah = wah2 = 4 m2; 1 acre = 2.53 rai & 1 ha = 6.25 rai 
To date foreigners may own

  - a unit in a registered Condominium

  - a building (as distinct from its land)

  - a registered leasehold of up to 30 years for all types of titled land (and/or buildings).

  - a company can purchase land and buildings only.

  - more than 49% of a condominium unless in Company form.If BOI status different

 - foreigners can own land being not over 49% in a proper Business orientated company but cannot secure a mortgage. Under BOI can buy.

  - if you invest 40m baht you can buy 1 Rai of land in Thailand outright


A 30-year lease can be a good idea with right to renewal to a freehold purchase, or a Thai company (7 PARTNERS) can be established with Thai majority shareholders. Foreigners only own 49% shares in a company but there are restrictions and rules to this as you must have a business running and audited. The other way is to lease for 30 years with R of R or to use an Usufract or superficies to assist you. We can assist you to make sure your company is safeguarded. Remember if you need advice ask us.

Beware as its not the first time when foreign Business partners have been cheated by Thai partners. It has happened a lot. Never have a limited Partnership in Thailand and make sure the Lawyer you use is straight and unbiased towards you? Go to www.chiangmailaw.com for any help or www.thaiexpatlaw.com

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WHEN TO PAY FOR YOUR PROPERTY

1/. Never pay deposit or booking fee over the Internet. See what you buy first

2/. Look at progress payment reports when, & how much

3/. Check the builder before you sign

4/. Talk to neighbours & others about the Moo Baan or buildings.

5/. Have a person on site to inspect interim work for you

6/. Do not be bullied into progress payments before work completed. If so then some middle man is getting his cut.

7/. When in doubt ask. Seek advice

   

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If you have a property to rent, sell or lease in Thailand then WRITE TO US as we can advertise for you in our hardcopy news in  Chiangmai . 

BANGKOK REAL ESTATE Please go to : www.bangkokrealty.biz

PATTAYA INVESTMENT SCAMS: Behind the scenes of fun in Pattaya there are the odd scam artists and one of these is no other than the Australian scam artist Lance Frederick Shaw of www.hiperfinance.com who scammed many foreigners in Pattaya and is still running FREE. Many foreigners have been taken with investment scams, condos never completed nore deposits returned and quick rich scams. [ READ MR SHAWS SCAM ]

PATTAYA INVESTMENT DEVELOPEMENTS: the famed Ocean 1 Tower:also stopped: World's Tallest residential building ??? 91 Storey Condominium Tower. April 18th 2006 they had sold: 79 units ??? it is said??125000 Euro for 1 bedroom. The price per square meter was 100,000 Baht. Will perhaps it will get off the ground once the Thai situation gets better but the way the politics is going there won't even be a high season as Thaksin & supporters fight for power. [Check out Ocean1 Tower ]

[ THAI LAW HELP SERVICE ]:  We have many more properties. Just ask us. Let us broker your business or property. If we don't sell we don't charge you.  Selling or wanting to Buy a Guest House, Restaurant, Business, Bar or Office then just ask us. We do not charge you to find your business. We even guide you to the best deal & help you form a company, partnership, year visa, agreements, leases, accounting services, taxation etc right to offering you FREE hardcopy promotions if you use our services. We offer what no other Thai company can do: FREE hardcopy advertising promotions. 

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2009 [ BANGKOK PROPERTY REPORT 1a 2 3 4 5 6 7 ] [ LEASING PROPERTY ] [ BUYING GUIDE ][ MORE BUYING GUIDE ] [ COMPANIES & LOANS FOR PROPERTY ]

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