«It’s easier to get into European and American universities from our international schools.» How interesting is Thailand’s real estate market and how much do apartments in major cities cost?
The Thai real estate market is constantly growing and developing and, of course, has its own characteristics. In which regions is it better to buy a house for living, and in which — for investment? Why do many people move to Thailand to send their children to local international schools? What are the options for owning property in the kingdom? More about of all this — in our material.
Most people today associate Thailand with tourism, but that was not always the case. Fifty years ago, tourism had no importance for the Thai economy — at that time, for example, Phuket was actively engaged in tin mining and rubber production. The tourism industry began to emerge in the kingdom in the 1970s, and now the Thai tourism destination — one of the top in the world. And what is more, there are an increasing number of people who want to , not just to perfectly spend a vacation here.
For example, over the last year the demand for real estate in Thailand among the Russians increased by almost 80 percent — the kingdom is the third most popular direction for them to buy a home after Turkey and the UAE. And for Europeans, Thailand is a favorite winter destination, where you can enjoy the sun while at home it is «cold». It is worth saying that the market keeps up with demand by stepping up the pace of construction: for example, in the first half of 2022 in Bangkok and its environs were built 52,964 houses, which is almost as much as were built in 2021.
«Apartments and villas are being bought more and more — people want to have a housing in a safe place»
Latest information about prices, demand and features of the Thai real estate market told us Svetlana Kasatkina, Managing Partner of Exotic Property.
— is growing: the borders have opened, the demand for real estate has revived, plus after the pandemic all construction sites resumed and new, interesting complexes began to appear more and more often. The market for rental housing is also keeping up: as many expats arrived in the resorts of Thailand, rental prices (especially long-term) have increased, and good deals are instantly sold out.
Prices now in connection with the start of the tourist season are gradually beginning to rise. All ready-made villas in complexes from the beginning of this year are already sold out, and there are only options that are still under construction — but for them, too, prices have already risen. Nevertheless, to make a deal at the initial stage, of course, more profitable, as prices in this case are always lower by 20-30%.
The Thai market attracts buyers as an investment property, as well as residential complexes for recreation by the sea or for comfortable living. In Thailand, the following practice is widespread: hotels take over the management of complexes with apartments or villas and sell them to investors. They, in turn, use the hotel rental programs and earn an income of 5-10% per annum. By the way, it is worth mentioning that in Thailand there is a special kind of luxury property under the hotel management — these are branded residences. You can live in them, using the services of the best 5-star hotels, and if you want you can also give this property in the rental program of the hotel and receive a steady income.
As for permanent residence in Thailand, there are now especially many requests to buy an apartment or villa for living or vacation - people want to have a home in a safe place. Many people move to Thailand with their families and send their children to Cambridge schools, as Thailand has a huge selection of international schools (more than 150). They are based on the British or American educational system, which makes it much easier to get into European and American universities (since most tests are automatically scored).
«Phuket real estate is always increasing in value because the amount of land here is limited»
— Now I will elaborate on the situation of residential real estate in the most popular regions of Thailand, as each of them has its own characteristics.
Bangkok is a vibrant and dynamic city, one of the fastest growing in Southeast Asia. It is home to more than 5.5 million residents who consider their city a promising business and financial center. Perhaps the main disadvantage of Bangkok is the long distance from the beaches.
The cost of 1 sq. m. in the city is on average $10,000 — respectively, the cost of an apartment (for example, 50 sq. m.) will be $500,000.
Foreigners are usually seeking to buy apartments in Pattaya for recreation and life, as there is a convenient air service and a developed infrastructure. Also, Pattaya is famous for the fact that there is real estate in different price segments, so that housing, on the whole, can be found for all pockets. Thus, apartments in high-rise buildings will cost at least $55-60 thousand, and the price of houses starts at around $250 thousand. However, from the standpoint of investment this region is not so attractive: due to the high competition for rent or resale here will not make much money.
Hua Hin has recently seen a construction boom, as it is located next to Bangkok and there is a lot of domestic tourism. And also in Hua Hin there is an active royal residence, so this city is considered the safest in Thailand.
A distinctive feature of Hua Hin in terms of real estate — here the apartments are built at least 40 square meters ( while in other regions there are also 25, and 30 sq.m.), and their cost ranges from $80,000. Villa on the first line of the city beach will cost about $1,000,000, and outside the city, away from the beach, you can buy a house already much cheaper — from $250,000.
There are not as many tourists on Samui as in other regions, because there is no international airport and you can only get here by domestic Thai flights. Also, Samui is characterized by its one-story building — you can not build high-rise buildings here. Curiously, all the housing is located on the shoreline, as the middle of the island is occupied by mountains. Prices start at $230,000.
Everyone has probably heard about Phuket and its snow-white beaches. As for real estate, on this island, it is always increasing in price, as the amount of land here is limited.
Foreigners buy real estate in Phuket, both for themselves and as an investment. Prices, however, are not small: the average cost per square meter — $3,500. So, for example, a one-bedroom apartment will cost about $120-150 thousand, more luxurious options — from $500 thousand.
«In Thailand you can legally buy a house even for cryptocurrency»
— Thailand’s real estate laws are the same as in European countries. There are two forms of real estate ownership for foreigners: Freehold and Leasehold. The choice of the particular option depends on what exactly you are buying and at what price.
Let’s start with apartments. Foreigners can acquire full ownership of the apartment only in a condominium (in this case, each apartment has its own owner, but the common area is in joint shared ownership). If the apartment building is not registered as a condominium, then the apartments can be sold to foreigners only in Leasehold (long-term lease).
If we are talking about the purchase of a villa with land, a foreigner can make full ownership only of the house (building). The land can be leased by a foreign individual only on a long-term lease for an average of 90 years.
As a side note. Normally, the Leasehold Agreement is for 30 years and is renewed twice. In this case, you have the right to resell the property to another owner, to whom a new lease will be executed with a new period. For example, after some time, you can re-register your apartment to a child, and in his name will be a new lease agreement. Also it is necessary to note that when you pay the rent for the apartment, in the payment description it is written «for the rent of so-and-so apartment», which simplifies the process of payment in the bank. And the documents you will have abroad will not be a property, but only a lease. But the rights are almost the same as in full ownership.
Now let me talk a little bit about taxes. Usually before the transaction, the lawyer goes to the Land Department and they give him a specific tax calculation. The fact is that there are several taxes on the sale and purchase: it depends on the type of property, how it was registered (full ownership or long-term lease), how many years it belonged to the previous owner, and who the seller and buyer are (an individual or a legal entity); plus these taxes are divided in different proportions between the buyer and the seller. Simply put, the buyer ends up paying about 2-3% tax.
Also in Thailand in 2020 was introduced a tax on the ownership of residential real estate. Once a year you will need to pay 0.03% of the contract value of the property, but on condition that the property is more expensive than 10 million baht (about $274 thousand). That is, if your property is worth 10 million baht, the tax on ownership will be only 3000 baht ($82) per year.
As for the loan, in Thailand to take it to buy a home is not easy, but there is a better option: you can get an installment plan from the builder. During construction (usually a year or two) installments are interest-free, after the completion of construction - is 3-5% per annum on the balance of the debt.
And another curious thing is that in Thailand you can legally buy housing, even for . However, at the moment it applies only to rental housing, as to obtain the right to unconditional possession, foreigners must transfer funds with the exact purpose of payment and fill out a special form. Such transactions can be made only in a bank.
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