Thailand’s Prime Minister, Srettha Thavisin, has proposed a policy allowing foreigners to lease land for up to 99 years and to own up to 75% of a condominium project as an economic stimulus measure. He has clarified that this policy would not equate to granting land ownership rights to foreigners. However, critics contend that such a move could lead to increased land prices, potentially hindering Thai citizens from owning land.
- 💰 Economic Boost: Prime Minister Srettha Thavisin believes that increasing foreigners’ rights to own condominiums in Thailand will stimulate the economy. He argues that this will attract more foreign investment, boost the property market, and create jobs.
- 📈 Market Revival: The Thai government sees this policy as a way to revive the sluggish property market. By allowing foreigners to own more condos, they hope to increase demand and drive up prices. This could benefit developers, investors, and the overall economy.
- 🏘️ Land Lease Extension: The proposal also includes extending the lease period for foreigners on land from 30 to 50 years, with an option to renew for another 50 years. This would give foreigners more security and encourage them to invest in Thai property. source
The recent announcement by the Prime Minister regarding the relaxation of foreigner condo ownership rights is a significant development that is expected to have a positive impact on the economy. This move aims to attract more foreign investors and boost the real estate sector, which is a crucial driver of economic growth.
Proposed changes to extend land-lease periods to 99 years and increase foreign condo ownership quota to 75% aim to attract more foreign investment and stimulate the real estate market in Thailand.
Foreign ownership in condominiums is currently restricted to 49% of the total units in a building. The proposed changes would increase this limit, allowing foreigners to own a majority of the units. This would make the country a more attractive destination for foreign investment, particularly from those looking to purchase property for residential or investment purposes.
Increased foreign ownership can drive up demand for condos, spurring construction activity and creating jobs in the process. This would not only benefit the real estate industry but also have a ripple effect on related sectors such as construction materials, furniture, and interior design.
Higher property prices
Moreover, the increased demand could lead to higher property prices, which could, in turn, increase the wealth of local property owners. It could also stimulate economic activity in the surrounding areas as new residents move in and spend money on local goods and services.
Furthermore, foreign investment in condos can bring in much-needed capital into the economy. This can help to finance development projects and improve the country’s infrastructure, further boosting economic growth.
The proposed changes also have the potential to address theissue of over supply in the condo market. By attracting more foreign buyers, it could help to absorb the excess supply, stabilizing the market and preventing a potential crash.
However, it is essential to ensure that the increased foreign ownership does not lead to a bubble in the property market. The government should implement measures to prevent speculative buying and ensure that the market remains stable.
Conflict of interest ?
- The government’s proposal to increase foreign ownership of condominiums and leaseholds may be seen as a conflict of interest due to potential connections to cabinet ministers, including the Prime Minister.
- The Interior Minister asserts that the proposed changes aim to stimulate the economy and protect the rights of Thai people, despite concerns about potential risks such as transnational crime and economic manipulation.
- Local property industry executives are advocating for a higher foreign ownership cap, citing increasing demand from foreign buyers and a slowdown in local demand due to high household debt and tighter lending conditions.
The Thai government’s proposal to increase the foreign ownership limit of condominiums from 49% to 75% and extend foreign leaseholds on properties from 50 to 99 years may be seen as a conflict of interest. A caretaker senator has raised concerns about a potential conflict of interest, claiming that the policy change could benefit property businesses connected to cabinet ministers, including the Prime Minister.
In 1984, Mr. Srettha founded Sansiri and the company was listed on the Stock Exchange of Thailand in 1996. Last year, he transferred all his 661,002,734 shares in Sansiri to his daughter Chananda Thavisin when he agreed to stand as a prime ministerial candidate of the Pheu Thai Party. Currently, she holds 553,002,734 shares, which is 3.14% of the total shares in the company according to SET records.
However, the Interior Minister defended the proposal, stating that it aims to stimulate the economy and protect the rights of Thai people. There are also concerns about potential risks related to transnational crime, money-laundering, and national security. Additionally, industry executives are pushing for the change in foreign ownership cap, while suggestions have been made to set minimum purchase prices for foreigners and impose restrictions on selling purchased condominiums.
In conclusion, the Prime Minister’s plan to increase foreign ownership rights in condos can bring significant economic benefits. It can drive up demand, boost construction activity, attract foreign investment, and address the issue of oversupply. However, it should be implemented carefully to prevent any potential risks to the property market.
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