Second Homes: Thailand’s Rise in the Property Market

With the world looking towards Asia as a formidable part of global economy, Thailand is fast climbing the property market as a potential investment option. As the country becomes more developed with a beautiful balance between culture and modernity, here is short guide to luxury homes in this exotic land

By: Yasushi Yamada, Head of Asia Region & COO of List Sotheby’s International Realty, Thailand

Posted on: April 24, 2020

Phuket to Panang, Bangkok to Buri Ram, Thailand’s property market has shown increasing returns during the 2010s with the trend expected to continue well into the 2020s. Although COVID-19 has destabilised the global economy a little, search engine requests for information on the Thai property market have increased, often prefixed with ‘how to buy a home in…’. Traditional buyers for Thai properties are increasingly Chinese, Japanese or other wealthy Far East Asian nationalities. However, with Thailand’s popularisation within Western culture, it’s not surprising we’re beginning to see an uptick in this search pattern in the West. So, how does one go about purchasing a Thai property? What should one be looking for? And, most importantly perhaps, what can one expect after purchase?

Bangkok Thailand

Why should you buy in Thailand?

Purchasing a second home abroad is a new step, a new adventure, one that should begin with the three Rs: research, research, research. 

Thailand’s property market has become increasingly popular for investment purposes as well as retirement, particularly for Europeans, Scandinavians and Russians. However, Thai homes are now being snapped up by buyers from wealthy Chinese-speaking regions, i.e. Mainland China, Hong Kong, Taiwan, and Singapore. This influx of buyers is having a marvellous impact on land value in key regions of Thailand. Thonglorhas, a region of Bangkok, has appreciated in value by roughly 66% in just five years. 

Development types are becoming increasingly diversified also, with an uptick in the number of mixed-use developments, where city-dwellers are looking for homes that will match their diverse and vibrant lifestyles. Where one might have previously expected to find a purely residential neighbourhood, it is now possible to find shops, nightlife and restaurants intermeshed with residences – all to convenience the varying schedule and lifestyle of future and current residents. 

What’s the quality of life like?

Bangkok city life thailand

Areas like Sukhumvit cater specifically to the luxury lifestyle – picking the right region is crucial. For those looking for early-morning yoga, brunch and coffee spots, 5 star restaurants, high-end fashion and rooftop bars, suburbs like Sukhumvit are perfect. For those looking to raise a family, this region is supported by the highest quality healthcare and education services that Thailand has to offer. Local schools include the world-renowned Bangkok Prep, American School of Bangkok and Nist International.

What sort of properties are on offer?

Traditionally, cities in Thailand were separated into residential and commercial plots, however, we’re beginning to see an increase in mixed-use developments. Residential homes were most famously built in skyscrapers – particularly in cities like Bangkok. Once you venture out to the surrounding rural and coastline areas, single unit homes become the norm. 

List Sotheby’s International Realty, established in Thailand recently, is offering homes such as Walden Thonglor 8 – the luxury low-rise project with 117 condominium homes. Conveniently located in the centre of Thonglor with the finest shopping and dining options in Bangkok. Features included within each of the 117 homes are designed to enhance perception and sensory connection, enabling buyers to truly get the most from their properties. 

Walden Thonglor 8 Bangkok Thailand

This Sukhumvit development has been designed with luxury in mind, providing a swimming pool, outdoor playground, fitness and outdoor exercise area, and Onsen hot tub and Jacuzzi. The property fits with Sukhumvit trends, promoting luxury, prestige and city living. 

How would you go about buying properties?

The process of purchasing can be daunting in one’s home nation, let alone when that home is in another country, another culture. 

Choosing the right neighbourhood is highly dependent on what you’re aiming to use the property for. For investment purposes, it makes sense to conduct appraisals on different parts of Thailand before going ahead with the purchase. 

For a holiday home, places like Phuket and other seaside locations could be perfect. For those looking to live permanently, schools and healthcare are high on your list. Again, it all comes down to what your needs are. Nonetheless, Thailand caters for all. The key message to take away is: research is vital. 

Walden Thonglor 8 Bangkok Thailand

What are the regulations?

In April 2019, Thailand’s government introduced regulation on mortgages for those wishing to purchase second homes. This regulation came in the form of a loan to value policy. 

In order to minimise the national debt statistics and alleviate the burden on Thai citizens, particularly following the 2008 financial crash, there is a limit to how much second-home-buyers can borrow in order to purchase homes. 

Previously, banks were able to loan up to 100% of the home value to potential buyers, leaving them heavily exposed. The new regulation provides a protection, asking second-home-buyers to cough up a share of the price of the home. This also discourages homeowners from purchasing a second home and immediately renting it out to Thai citizens for an increased rate.

Following its introduction, the regulation caused a slowdown of the Thai property market, since the entry cost was considerably higher. Developers, in turn, have been slow to develop properties for this reason. 

However, this is still good news. The decreasing supply has steadied the rapidly growing market, making it more predictable, manageable and mitigatable for homeowners. Now truly is the best time to buy in Thailand. 

Yasushi Yamada Sotheby's International Realty ThailandWith over 20 years of profound experience in real estate finance, a strong track record in trading and an extensive network in Japan and overseas, Mr. Yamada is the perfect leader to operate and oversee the Asian branch of Sotheby’s Interntional Realty. Mr. Yamada began his career in ITOCHU Corporation, the second largest general trading company in Japan, and subsequently joined Hypo Real Estate Capital as a leader. Later, he shifted his focus to cross-border property investment, further exploiting his expertise in brokerages and expanding his network in sizable companies such as Mori Building, Tokio Marine and CBRE Japan. He was the head of the consulting business in CBRE Japan before joining List Group.

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