Thailand is consistently in the top 5 destinations for foreigners. It may not be that attractive for investments but it’s in the top 10 popular regions for investments among foreign nationals. If you are also wanting to benefit from high-income housing in Thailand, you need to find out how it differs from properties in other regions of the world before buying a property in Thailand.
Content:
- 1. You can buy a villa in Thailand
- 2. When buying real estate, a foreigner receives a residence permit
- 3. Buying an expensive property gives you the right to apply for a visa
- 4. A foreigner can buy any apartment
- 5. You cannot use a mortgage — you have to pay immediately
- 6. There are no tourists during the rainy season
- 7. Real estate demand in Thailand is falling
- 8. Serious investors do not invest in cheap housing in Thailand
- 9. High competition in the housing market reduces profitability
- 10. It is impossible to transfer money from some countries to Thailand
- Conclusion
1. You can buy a villa in Thailand
On the Internet and in the media, people often discuss buying mansions in a resort country. However, only wealthy foreigners can purchase a house with special terms.
When buying a villa in this case, there’s another option — a leasehold. Simply put, this is a property for long-term rent — for 30 years. At the same time, the tenant can resell his lease rights to another person or legally rent out the real estate to tourists. This is a plus for the buyer as he does not need to pay property taxes. For many investors, this option is sufficient.
2. When buying real estate, a foreigner receives a residence permit
When buying real estate in other countries a foreign citizen will receive a residence permit - this is the norm. E.g., in Turkey, almost any housing will allow you to get a residence permit. However, buying a residence in Thailand does not give such advantages.
There’s an opportunity to get a Thai Elite visa in the country, but only when buying real estate for over TBH 10 million ($306,025).
3. Buying an expensive property gives you the right to apply for a visa
Expensive real estate will allow a foreigner to get a visa with the right to stay for a period of 5 to 20 years. However, the Thai Elite program is more than a standard visa. Here is how it differs from a residence permit:
- it does not allow you to obtain citizenship;
- it’s valid for 20 years;
- you can pass through the airport on a dedicated line, use the waiting room and the transfer;
- it provides discounts and benefits in various establishments;
- you can communicate with an assistant to solve bureaucratic problems;
- you can visit medical institutions;
- you can visit sports complexes and spas.
The Thai Elite visa is not a standard visa, but a special VIP privilege for a foreigner.
4. A foreigner can buy any apartment
All foreign nationals can purchase condominiums in Thailand, regardless of their income and investments in the economy. However, the law provides restrictions for residences.
Thus, foreigners can only buy real estate in a condominium when the residents have purchased 51% of the properties. Therefore, housing in new buildings only becomes available to investors when the Thais implement a sales plan.
5. You cannot use a mortgage — you have to pay immediately
In many parts of the world, investors can use a local mortgage, but in Thailand, it’s very difficult to get a loan from a bank.
However, there are alternative options when registering the ownership of development projects in Thailand. E.g., overseas investors can arrange instalments from the developer. In this case, the initial payment is 20-30%, and the remaining amount can be paid over several years.
6. There are no tourists during the rainy season
This myth is incorrect in two ways simultaneously. Firstly, the rainy season does not affect the whole country. In Phuket, it can indeed rain for several days. However, this does not affect the mainland much. E.g., in Pattaya and Bangkok, it rains in the mornings during these months. Therefore, the season does not have a large impact on the demand in these areas of the country.
Secondly, over the past couple of years, there’s been an increase in the number of expatriates who rent housing over a long period — 1 or several years. This contributes to the new Thai LTR visa programme, which provides for freelancers with a stable salary to stay.
7. Real estate demand in Thailand is falling
The statistics for 9 months in 2022 showed that real estate prices fell by 2.65% over the year. However, housing sales increased. This means that the fall was caused by the purchasing power of the Thais and that the sales of luxury housing are still in great demand.
8. Serious investors do not invest in cheap housing in Thailand
The facts regarding cheap housing in Thailand have long been a myth. You can find low prices in the country but for non-investment real estate.
If we consider residences for investments, the minimum threshold is $100,000, as in other countries. In addition, the country has many expensive and ultra-luxurious projects. E.g., in Bangkok, there are over 400 apartments for over $1 million. In Phuket, you can easily find a mansion for several million or even tens of millions of dollars with a magnificent view of the surrounding area and the sea.
9. High competition in the housing market reduces profitability
There are many real estate options for investment here. However, the yield remains level, especially on the islands. E.g., in 2022, when the decrease of tourists arriving in the country was triple than that of 2019, the average yield in Phuket was 6.77%.
In 2023, the government expects the number of tourists to increase by more than double. Therefore, we can expect that the houses in Thailand will add a couple more points to the yield. So, the average values should reach 8-9%.
10. It is impossible to transfer money from some countries to Thailand
After sanctions were imposed, the restrictions at first caused great difficulties with money transfers but now everything is fine. The governments of some countries, e.g., the government of the Russian Federation, have lifted strict bans on transactions, and developers have started accepting rubles and cryptocurrency for payment. Therefore, investors will always have the opportunity to pay for the purchase, and experienced realtors will suggest the best options.
Conclusion
Buying a home in Thailand, as in any other foreign country, is shrouded in myths. This article tells you about the most popular misconceptions and shows how profitable real estate investments in the resort country actually are.