Thai authorities believe that with low demand, local developers will suffer from the expansion of quotas.
The Kingdom's economy and its real estate market have always relied on the tourism sector. Housing, hotels, and commercial properties depended on the influx of foreign visitors and buyers into the country.
With the record drop in the number of foreigners entering the country to buy properties, run a business, or invest in real estate, Thai government authorities have faced challenges in developing existing and new initiatives to revitalize the sector.
One of the proposals was to extend the quotas for condominium apartments, whereby foreigners could acquire up to 49% of the area of the residential complex in indefinite use (Freehold). In addition, there was the issue of extending the deadline of real estate delivery in leasehold to foreigners from 30 to 50 years.
In January 2022, the Thai Economic Situation Management Center, chaired by Prime Minister Prayut Chan-Ocha, rejected both proposals after lengthy debates.
Officials did not give reasons for this decision, but market representatives associate it with the oversupply of quota housing. Due to insufficient demand, developers and homeowners cannot cover these quotas, resulting in cheaper real estate on the market. Expanding quotas without changing purchasing demand will only worsen this complex situation.
Other experts point out that at least extending the leasehold terms for real estate could help sales in the low-rise housing segment in the future, but the regulator did not want to reconsider the decision.
Another proposal was approved to grant foreigners the right to acquire land plots of up to 1600 sq. m. for personal use. The Land Department of Thailand has two months to develop the details of the new regulation.