With overall sales growth of 7% in 2009, there is ample reason to believe that the worst is over. One business resource predicts that there will also be a sustained 7%/year growth over the next five years in Thailand building and construction. It is estimated that 500 semi-completed building projects are coming back online. Thai laws relating to foreign ownership of real estate are complex, so a real estate experienced attorney should be consulted. Condominiums are the most popular purchases, but regular homes can be found, and some even work with construction companies to build a home. This allows taking advantage of bargain labor and material costs.
While bargain purchases can be found in Thailand, mortgage financing is likely to be problematic, with 50% financing a common number when a mortgage can be found. Some foreign buyers are getting funding in their home countries and transferring the funds to Thailand for their real estate purchase. Taxes and fees vary from 3% to 5% or more in a transaction. It’s a beautiful country, and these challenges are not deterrents to foreign buyers. The expectation is for more foreign buyer activity in the future.
The expiration of the tax and fee incentives will result in price increases as builders and developers pass on their increased costs. The extra cost will be around 4% for builders and developers. How much is passed along will likely be influenced by competition in the market. There is a great deal of new activity, so analysts expect that some builders will absorb some or all of the cost increases in order to better compete in the marketplace. The Thailand real estate market is in a rebound, and it’s not likely that tax changes of this magnitude will have an appreciable negative impact on the brighter future ahead.