The previous credit crisis that undermined the global economy has certainly affected the Asian economic region to some degree. Thailand too was not spared from the economic calamity that has claimed numerous businesses and has driven away both tourists and investors alike. Nonetheless, the Thai economy has proven its resiliency and recent events have shown that the country is on its way back to full economic recovery. Thailand has learnt many important lessons from the Asian economic crisis in 1997 and has since that period implemented various fiscal and monetary policies to curb another economic calamity.
The economic resurgence felt by the Thai real property market has been largely attributed to its comparatively low interest rates. Ever since the start of July 2004, the interest rates in Thailand have remained at the steady rate of one point twenty five percent (1.25%), the lowest seen thus far. Another important development is the aggressive investment policy initiated by the Thai government in the form of the “Strong Thailand 2012” program. The aim of the program is to bolster public consumption, private expenditure and investment in the country particularly in key areas such as real estate. So far, most economists have expressed a shared feeling of optimism as inflation remains to be a minor concern with a predicted rate of only two point five percent (2.5%) annually as global oil and agricultural industries recover.
Condominiums are one of the most popular kinds of property in Thailand as the country currently experiences a rise in the number of development projects. As a result of this, an oversupply of condominium units looms as developers begin to focus more on creating low-rise projects offering townhouses, semi-detached houses and detached houses particularly in Bangkok. In other areas such as Phuket, demand for mid to high end condominium projects remains steady as developers continue to offer available units to consumers. Coupled with the law allowing foreigners to wholly own condominium units within its quota, it is expected that demand for such properties will continue to grow well within the first quarter of 2010.
Acquiring property through leasehold rights despite its disadvantages has remained a constant option for foreigners in acquiring property rights within the country. Especially since the Thai economy has seen a sudden drop of interest rates from four point seventy five percent (4.75%) last January 2007 to its current rate of one point twenty five percent (1.25%), a growing number of individuals, both foreign and local alike, are looking at leasehold as pragmatic alternative to direct ownership. In an attempt to bolster the growth of leasehold in the country, some banks in Thailand have already begun offering loans to foreigners who plan to acquire property on a leasehold basis. So far, most of the loans involved do not exceed seventy percent (70%) of the loan price.
It is believed that with the recent developments dealing with the prohibitions on foreign ownership of land, the rights of Superficies and Usufruct would develop as a viable means of securing land or property interest within the country without the need for circumventing any prohibition on foreign land ownership and interest.
In conclusion, the Thai property market holds a lot of potential as the country emerges from an economic crisis. With the steady growth of its real estate industry and its continued imposition of lower interest rates, investors are once again beginning to flock back to the country bringing with them additional capital to further fund the growing property development industry. It is therefore no surprise that most observers have reconsidered Thailand as a key economic figure within the Southeast Asian region.