Apartments for Sale – Bangkok

The Kingdom of Thailand is at the centre of the Indochina peninsula in Southeast Asia, bordered by Myanmar and Laos to the north, Cambodia to the east, and Malaysia to the south. The Gulf of Thailand lies to the south and east, and the Andaman Sea to the west. The capital of Thailand is Bangkok. Formerly known as Siam, the kingdom was renamed ‘Thailand’ in 1939.

Thailand’s population is approximately 69 million (2016). In addition to the ethnic Tai majority, there are significant numbers of Thais of Chinese descent, migrants from Myanmar and other neighbouring countries, hill tribes and other minorities, and a sizeable population of Muslim-Malays in the south. Buddhists make up 93% of the population.

FACTS

Capital: Bangkok

• Population: 69 million
• Area: 513,115 sq km (198,115 sq miles)
• Major language: Thai
• Major religion: Buddhism
• Life expectancy: 71 years (men), 79 years (women)
• Currency: Baht

UN, World Bank

RESIDENTIAL PROPERTY FACTS

Price (sq.m): $3,952

Rental Yield: 5.13%

Rent/month: $2,029

Income Tax: 2.73%

Roundtrip Cost: 10.90%

Cap Gains Tax: 35.00%

Landlord and Tenant Law: Pro-Landlord

Thailand’s housing market is weakening, despite a stronger economy. The average price of single-detached houses increased slightly by 0.2% (but in real terms it fell by 0.6%) during the year to Q3 2017, a slowdown from last year’s 1.4% growth, according to the Bank of Thailand (BoT).  During the latest quarter, house prices increased by 1.5% (1% in real terms) in Q3 2017.

• Condo minium price rises decelerated sharply to 0.35% (-0.5% in real terms) during the year to Q3 2017, down from an 8.2% y-o-y rise during Q3 2016. This was the lowest annual price growth since Q1 2011. Quarter-on-quarter, condo prices increased 0.59% during the latest quarter.
• The town housesegment is more resilient, with price rises of 4.24% (3.35% in real terms) during the year to Q3 2017. During the latest quarter, townhouse prices increased 1.86% in Q3 2017.

Land price increases are also slowing nationally. The land price index rose by 1.59% (0.72% in real terms) y-o-y in Q3 2017, a sharp slowdown from a 7.9% rise the previous year. However during the latest quarter (Q3 2017), land prices actually increased 5.3% q-o-q.
Residential construction activity is declining rapidly. Condominium registrations and land development licenses issued for residential buildings in the country fell by 19.6% y-o-y and 18.8% y-o-y, respectively in Q3 2017. In Bangkok Metropolis, land development licenses fell by 4.7% while condominium registrations plunged 15.5% in Q3 2017 from a year earlier

CBRE expects a slowdown in overall demand, mainly due to a decline in speculative buying. “Sales will take longer as CBRE believes there will be less speculator interest in the market and demand will be driven more by end-users,” said CBRE. “The long-term market will be affected by slower growth in expatriate numbers and the change in the composition of nationalities of foreign residents.”

Foreign homeownership rules

Foreigners cannot buy land in Thailand, only condominium units and apartments. Foreigners cannot make up more than 40% of the condominium’s unit-owners. However, a foreigner can buy a whole building, minus the land on which it is built.

In recent years, minor changes in Thai law have allowed nonresidents to further explore the Thai real estate market. A foreigner can have a 30-year renewable lease, under which the buyer registers at the Land Office an option to renew the lease contract indefinitely, for further 30-year periods.

There are serious drawbacks to this lease arrangement, however. Lease renewals cannot be registered and are not effective against a purchaser of the property. And the lessee cannot (without the lessor’s consent) sublease, sell or transfer his or her interest.

Another option is to set up a private limited company with mixed Thai and foreign ownership, the foreign ownership being 49% or less. Companies are allowed to own land. The foreign national can control the company by using a legal power of attorney from the Thai shareholders, handing control to the foreign directors, or through assigning greater voting rights to the foreigner partner/s. This is an effective and time-tested route, most commonly taken by foreigners. The help of a lawyer is very important.

Foreigners can also invest at least THB40 million (US$1.21 million) in a Board of Investment approved project. They will then be allowed to purchase up to 1 Rai (1,600 square meters) of land.

Thailand’s economy is improving

Thailand’s economy expanded by 4.3% y-o-y in Q3 2017, up from a 3.8% growth in the previous quarter and the fastest pace in more than four years, mainly buoyed by strong exports and rising personal spending. The economy expanded by an average of 2.5% from 2013 to 2016.

Where to buy property in Thailand

The Kingdom of Thailand is a tropical paradise surrounded by the rich Southeast Asian landscape and emerald equatorial waters. It is a nation of sunny islands in the south and urbanized metropolitan areas that demonstrate the continuous progress of this developing nation.

With more than 14 million international arrivals in the country, Thailand is one of the most popular destinations in Asia. It has one of the most active tourism industries in the world, and has become the gateway to the rest of the Asia-Pacific region and Indochina.

The Central Plain is home to the majority of Thailand’s population. The highest concentration of people is in the metropolitan area of the capital, Bangkok.

Southern Thailand is located in the Malay Peninsula and is famously known for its tropical appeal: the islands scattered throughout the Andaman Sea and the Gulf of Thailand, the white sand beaches, and the famous dive sites.

The tourism sector drives Southern Thailand’s economy, thanks to the popularity of Phuket, its neighbouring islands, and some towns on the mainland, particularly Phang-nga, Krabi and Trang.

The North has nine cities, the most important of which are Chiang Mai, the largest city in the region; Sukhothai, the original capital of Thailand; Nan, for its history, temples and surrounding mountains; and Chiang Rai, the access point to what is known as the Golden Triangle where Thailand, Laos and Myanmar meet. This region is noted for its own dialect, Kham Meaung.

Bangkok property – yields on larger apartments moderately good

Rental yields in Bangkok range from 5.0% to 8.0%. Over the past three years, we’ve seen yields on medium-sized apartments (120 sq. m.) rise significantly.

In most countries´ major cities, smaller apartments earn higher rental yields than bigger apartments.  That´s not true in Bangkok. A 60-square metre (sq.m.) apartment in Bangkok’s central location now earns gross rental yields of around 5.6%, while a 120-sq.m. apartment also centrally located, earns gross rental yields of around 8.0%.

Yields have risen at the luxury end of the market, though since last year they have fallen for the large sizes, such as 250 sq. m.

Real estate developers in Thailand are offering Bangkok apartments for sale as well as for rental purposes.

Thailand Statistics