What's affecting the Thai Property Market?

There are many people asking the question why, after a prolonged rise in the Bangkok property market, are prices slowing? There are a number of factors, usually attributed to the rise in interest rates or the slowing of the economy, but in the case of foreign buyers these factors hardly contribute to their reason to slow purchases. In September 2006 the Thai military staged a coup to depose the popular but allegedly corrupt Prime Minister Mr. Thaksin Shinawatra.

At the time, AP reported that "the coup caused little stir in Bangkok's popular tourist districts, where foreigners packed beer bars and cabarets just a few miles from where the tanks were posted."

Many thought this would have an effect on foreigners buying property in Thailand but the opposite occurred; more deals went through. However, many thought the draconian visa rules would be relaxed but were not. As MCOP reported, "The Thai government on Friday announced new visa regulations for tourists limiting the foreign visitors to a maximum stay of 90 days each every six months in order to ease social problems and crime in the country." This contributed to buyers lessening their spend but not by much. There were also changes made to company formations where rules were enforced affecting the purchase of a house or land under a Thai company. This shook the popular costal resort market greatly. Another event that caused major confusion was the central bank imposing a 30% rule on capital inflows that meant investors had to park these funds with the bank for one year.

The Thai government could install confidence again by offering longer leases to foreigners buying land/houses as suggested by various chambers of commerce, to increase options for the visa status of property owners and, of course, to institute a new democratically elected government.

You can contact Soho Properties at sales@soho-properties.com.