Over the past few years, the ringgit has weakened considerably, and many Malaysian investors have regretted missing out on an opportunity to invest abroad when the ringgit was stronger.
With the recent rebound in ringgit, an increasing number of Malaysian investors are now considering property investments abroad including in Bangkok, Thailand which is fast becoming a major property market among international investors.
For those of you who may be considering investing in Bangkok or Thailand, here are 7 things to take note of:
It offers the same favorable fundamentals as other major real estate markets globally. The Thailand real estate market is expected to grow by 6% – 8%, spurred by the government’s plans to further enhance transportation infrastructure (Mass Rapid Transit) notwithstanding a US$45 billion investment to develop the Eastern Economic Corridor and entry to Bangkok which will see huge investments in infrastructure and tax incentives to attract direct foreign investment.
Last year, Thailand welcomed a record-breaking number of more than 35 Million visitors from all over the world, maintaining it’s position as Asia’s most visited tourist destination. And with the expanding tourism industry, we are seeing exponential growth in demand for short-term rental contracts and holiday homes, in particular for those close to BTS stations.
Based on CBRE Thailand’s property report, the average price of a high-end condominium in Bangkok is about THB 11,148– 18,580/sqft (MYR 1,389 – 2,316/sqft) depending on its location.
Although newly launched luxury units in the CBD have seen prices rise due to strong demand from foreign investors and expatriates, it is still significantly lower than prices in other markets such as Singapore, Hong Kong and London.
According to Knight Frank Research, five-year capital gains from 1Q2012 to 1Q2017 for high-end condos in Bangkok was around 51.3%.
Assuming that you invested in a 1-bedroom condominium at 2 Mil THB (249,213 MYR) in 2012, your 1-Bedroom will now be worth more than 3 Mil THB (373,820 MYR), even as it continues to yield rental income.
It is however not too late to enter the game. According to CBRE Thailand, properties close to mass rapid transport like MRT and BTS will likely continue to surge in price due to the high demand from local and foreign home buyers coupled with the scarcity of good sites in central Bangkok.
In Thailand, foreigners are allowed to purchase and own freehold condominiums up to 49% of the total number of all units. Buying a freehold condominium is therefore an ideal option for those who are looking to buy and own freehold property.
Thailand is friendly towards foreign investment unlike most countries where foreigners may be required to pay additional property tax. Contracts are mostly written in Thai but are translated into English.
In terms of taxes and fees, buyer acquisition cost is only at 1.5% of the property price – stamp duty at only 0.5% plus transfer fees of 1%, with no legal fees involved.
On top of the attractive tax structure for foreign buyers, it is also relatively easy for property owners to sell their Thai home. You can sell to anyone be it a local or a foreigner, there is no restriction and no seller stamp duty or any minimum investment period, another reason why so many foreign investors favour Thailand in comparison to investing in traditional markets such as London, Australia or Singapore, where there are often additional taxes and fees for foreigner to purchase or sell a property.
This competitive tax structure coupled with the comparatively low entry price point makes it attractive for foreigners to enter the Thai property market.
Similar to buying a property in Malaysia, it is important to choose a well-established developer. Not only would they have professional legal advisory service for you, leading developers, such as Sansiri, would also include after sales services such as Property Management and Residential Leasing services to provide a hassle-free solution for foreign investors.
Being one of the leading developers in Thailand, Sansiri is known for its portfolio of diverse range of properties, from Entry-level developments like “The Base” to Mid-range condominiums like “The Line” to Super Luxury trophy assets like “98 Wireless”.
Sansiri’s developments have always been favoured by property buyers, including foreign investors. All Sansiri projects, be it entry-level to luxury-range, are strategically located close to CBD and BTS and features top of the line facilities with an international standard concierge service. On top of that, Sansiri offers one of the best property management services in Thailand to help non-residents rent out their property and achieve the best possible deal.
The leading Thai Developer recently brought to KL, one of its landmark developments in Bangkok, The Line 101. During the launch event last weekend (24 & 25 March), Sansiri’s Country Manager of the Singapore and Malaysia Region, gave a detailed speech on the investment outlook of Bangkok’s property market, enticing more property investors in KL to consider adding a Bangkok property into their investment portfolio. For those of you who missed the launch event, you can leave Sansiri a message to find out about their latest property, The Line 101, or the investment outlook of Bangkok.