Blog Right Sidebar - zonezi.net

Suburban Property market is booming in major Southeast Asian cities

As the advance of transit systems gives rise to suburban bed towns in Southeast Asia, real state developers are quickly seizing the opportunity to supply homes to the emerging ranks of residents who commute to city centers.

Near the Chatuchak subway stop about 10km north of central Bangkok, real-estate developer Sansiri is building a large condominium comprising about 800 units. The area has few high-rises and is close to the starting station of the Purple Line urban rail service launched in August.

All of the apartments were sold on the first day they went on sale. Some of the buyers were foreign investors from Hong Kong and elsewhere, but many were Thais who plan to live in the complex.

“There is solid demand among those who expect improved convenience in the future,” says Uthai Uthaisangsuk, a senior executive vice president of Sansiri.”

The second-largest property developer in Thailand has formed a joint venture with BTS Group Holdings, an operator of elevated railway services that owns land around the routes. The duo will together invest $2.86 billion by 2020 to construct 25 properties, including projects in Chatuchak.

New commercial establishments are also popping up in greater Bangkok. Retail titan Central Group, for instance, opened the CentralPlaza Westgate in Nonthaburi Province in late August last year.

Central Plaza Wrstagate is one of the biggest commercial facility in Southeast Asia

The commercial facility is one of the biggest in Southeast Asia, with about 500 domestic and foreign brand vendors occupying floor space totaling 500,000 sq. meters.

Property developers in Thailand all expect growth to pick up in the outer-ring area of Bangkok, suburbs outside of the roughly 5km radius from central Bangkok. U.S. real-estate giant CBRE projects that condo supply in Bangkok suburbs will increase 15% this year to a record 61,000 units. By contrast, the supply of new condos is seen decreasing in the central city.

Similar projects are expected in other major Southeast Asian cities where railway systems are under development. Improvements in transit systems are creating suburbs that draw residents from nearby villages and city centers.

Invest in your future now

There are 3 new Phuket housing projects designed for low income earners and those on financial assistance and reservations for units in these developments have been brisk, according to local media. Prices at the projects start at THB3.79 million and some of the homes will be completed and ready to move into by the end of 2018.

“The National Housing Authority (NHA) is creating 8 residential projects in 3 provinces, including Buriram, Phuket and Samut Prakan. In Phuket, there are 3 new projects. Firstly, ‘Phuket Thepkrasattri’, which is a 3-storey community housing project located near Laem Hin seafood in Koh Kaew. Each house is about 20 square meters,” says NHA Head of the Projects Pakum Noimanee to The Phuket News.

The Phuket Thepkrasattri project will have a total of 66 homes all but 9 of which have been reserved by buyers who qualified for the programme. The development will be finished sometime next year.

“The Phuket Thalang project, which consists of 19 3-storey townhouses, is divided into apartments and located in Srisoonthorn, beside the Phuket Community Housing Office. It is an extension of a pre-existing low income housing project,” says Pakum.

The apartments are 33 square meters in size and all units come with 1 bedroom and 1 bathroom. Prices start at THB620,000 and there are less than 50 units available for booking. The project will also be finished next year.

“The 3rd project in Phuket is the ‘Garden Ville Phuket By NHA’ comprising 2-storey townhomes. Each house is about 18.5 square meters and prices start from THB1.59 million. There are 354 total town homes in Garden Ville and about 200 have already been booked,” says Pakum.

The idea behind the programme is to help low-income Thais or those who are receiving financial assistance from the government afford housing. The NHA has developed similar projects in Phuket in the past, all of which have been successful with buyers.

February 16, 2019ZONEZI No commentsNews, Real Estate

Foreigners cannot buy land in Thailand, only condominium units and apartments. Foreigners cannot make up more than 40% of the condominium’s unit-owners. However, a foreigner can buy a whole building, minus the land on which it is built.

In recent years, minor changes in Thai law have allowed nonresidents to explore the Thai real estate market. A foreigner can have a 30-year renewable lease, under which the buyer registers at the Land Office an option to renew the lease contract indefinitely, for further 30-year periods.

There are serious drawbacks, however. Lease renewals cannot be registered, and are not effective against a purchaser of the property. And the lessee cannot (without the lessor’s consent) sublease, sell or transfer his or her interest.

Another option is to set up a private limited company with mixed Thai and foreign ownership, the foreign ownership being 49% or less. Companies are allowed to own land. The foreign national can control the company by using a legal power of attorney from the Thai shareholders, handing control to the foreign directors, or through assigning greater voting rights to the foreigner partner/s. This is an effective and time-tested route, most commonly taken by foreigners. The help of a lawyer is very important.

Foreigners can also invest at least THB40 million (US$1,142,857) in a Board of Investment approved project. They will then be allowed to purchase up to 1 Rai (1,600 square meters) of land.

February 16, 2019ZONEZI No commentsNews, Real Estate

IN THE PAST DECADE, Thai properties marketed overseas were either projects in prime downtown Bangkok or properties in top resort destinations such as Phuket.

Nowadays, visitors and investors are becoming more familiar with other non-prime locations in Bangkok through information from social media and digital communications.

New condominium property prices in downtown Bangkok have increased to an average of over Bt260,000 per square metre, with starting prices of over Bt10 million. The high Central Business District (CBD) prices combined with marketing efforts of non-prime locations by Thai developers, over the last two years, has increased awareness and interest from overseas investors in non-CBD Bangkok locations who are keen to invest in the fringe of the downtown areas or in midtown locations, especially along the extended mass transit lines where prices are more affordable than downtown areas.

The popular prices for these locations range between Bt3 to 10 million per unit.

February 16, 2019ZONEZI No commentsNews, Real Estate

THAILAND has been ranked 34th in the Global Real Estate Transparency Index (GRETI) 2018 put out by property consultancy firm JLL.

The result in the newly released biannual represents a marked improvement from the 2016 edition of the index, when the country was ranked 38th.

Compared with the other six countries from Southeast Asia covered by the index, Thailand is ranked the third most transparent real estate market in the sub-region, followed by Indonesia, the Philippines, Vietnam and Myanmar, which were ranked globally 42nd, 48th, 61st and 73rd, respectively.

JLL said the 10th edition of the GRETI contains the most comprehensive country comparisons of data availability, governance, transaction processes, property rights and the regulatory/legal environment around the world. The 2018 Index covers 100 countries and 158 city markets, and the number of individual factors covered has increased by 36 per cent to 186 factors.

February 16, 2019ZONEZI No commentsNews, Real Estate

With the Thailand 4.0 blueprint becoming a key driver of evolution towards a value economy, Thailand is set to become a centre of innovation and technology in South East Asia.

Alibaba has recently announced their strategic partnership with the Thai government in support of Thailand 4.0, which will bolster developments in e-commerce and digital talent. A “Smart Digital Hub” aimed at boosting regional and global trade will also allow the kingdom to access China’s large consumer base. All these point to a strong outlook for professional recruitment services in Thailand as the need for a more sophisticated workforce increases. Here are some of the key employment trends to look out for this year:

February 16, 2019ZONEZI No commentsBusiness, News

Good fortunes forecast for 2018

The EEC, mass transit projects and a brighter economy bring good tidings for the real estate market.

Thailand’s property market prospects are expected to be bright next year based on the country’s economic expansion, government spending on big-ticket infrastructure projects and the rise of the Eastern Economic Corridor (EEC).

Surachet Kongcheep, a property analyst, says market growth will mirror the country’s positive economic trajectory. Key factors boosting the economy are spending on the EEC and mass transit line expansion.

SET-listed contractor Ch.Karnchang Plc said new infrastructure projects that the government plans to open for bidding next year include the southern Purple Line from Tao Poon to Rat Burana — the largest one at 130 billion baht.

February 16, 2019ZONEZI No commentsConstruction, News

Shaky law on Airbnb rentals

A court ruling on Airbnb in Hua Hin was meant to weaken sentiment among condo buyers who buy units to rent out on a daily basis. Yet the data shows the number of daily-leasing units continues to rise.

Apichart Chutrakul, chief executive of SET-listed Sansiri Plc which has developed a large number of condo projects in Bangkok and the provinces said developers cannot stop condo buyers who want to rent out their unit on a daily basis.

“We cannot control it and it’s not our duty to do,” he said. “After we develop a condo project and transfer units to buyers, it is the juristic person’s duty to manage the property.”

Sansiri has a subsidiary, Plus Property Co, which is a property consultant and property management firm. It manages Sansiri’s projects once completed and delivers units to buyers.

“If the majority of co-owners at a condo project agree to allow daily leasing, we as a property management firm need to follow their resolution,” he said.

He said the daily leasing of residential units is a world trend of the sharing economy. Like Uber, those who benefit are consumers, while the taxi drivers lose out.

However, government agencies cannot prove whether a car with passengers is an Uber or not.

Many cities in the world have tried to ban Airbnb but the number of units available on the platform has not declined.

“If non-Airbnb unit owners say that Airbnb infringes upon their ownership rights, they must realise that they [non-Airbnb unit owners] cannot infringe upon other owners’ right [to rent out on a daily basis],” he argued.

Mr Apichart does not believe that laws can enforce a ban on the daily renting of condo units, just like laws can’t guarantee people don’t cross the street in non-designated areas.

“In Thailand, daily and weekly rentals are already difficult to do as hotel rates are cheap,” he added.

Tritecha Tangmatitham, managing director of SET-listed developer Supalai Plc, said the company has a policy to prevent buyers who purchase condo units for daily renting by limiting customers to one unit per project.

“Investors who aim to buy for daily renting usually buy many units at a project as the management cost will be lower than having only one unit at a site,” he said.

Chanin Vanijwongse, chief executive of developer Habitat Group, which offers a rental yield guarantee at its projects in Pattaya, all of which have a hotel licence, said a court ruling on Airbnb in Hua Hin will have an impact on developers and buyers renting out on a daily basis, particularly in resort destinations.

“This ruling will not affect a condo if it has a hotel licence,” he said. “Any condo which is under construction and wants to offer daily rent can adjust the specifications to bring them in line with hotel regulations and apply for a hotel licence.”

February 16, 2019ZONEZI No commentsBusiness, News

Asian cities lorded over the Economist Intelligence Unit’s Worldwide Cost of Living report, out last week.

Names from the continent dominated both lists of the costliest and most affordable places to live in the world, per the report’s Cost of Living Index. Five of the world’s top six expensive cities are all in Asia, while cities in the Indian subcontinent make up half of the 10 least costly cities on earth.

Some traditionally expensive alpha cities have become more affordable of late. Due to the post-Brexit depreciation of the sterling, London is now only the 24th most expensive city in the world, while Manchester registered the biggest fall, from number 26 previously to a distant 51, making it cheaper than Beijing and tying it with Bangkok.

London is now a far greater lifestyle bargain than New York City, at ninth place, for the first time in 15 years, and Paris, at eighth place.

To arrive at the results, EIU tracked 400 individual prices across 160 products and services, including clothing, food, transport, home rents, utility bills, private schools, and recreation, in 133 cities around the world.

February 16, 2019ZONEZI No commentsNews

A raft of unprecedented benefits in store for lessees

Thailand is bracing for the passage of the leasehold draft bill that is expected to entice more foreign lessees to the property market, according to the Bangkok Post.

The Council of State is due to vet the leasehold bill after public hearings ended on 16 June. The bill has already received cabinet approval.

Under prevailing laws, foreigners can own condominium units but are prohibited from acquiring land, except in special arrangements with the Board of Investment and the Industrial Estate Authority of Thailand.

Lease rights are also not transferable and cease automatically at the time of the lessee’s death.

February 16, 2019ZONEZI No commentsNews, Real Estate