A good time for property investment?

[Burger]

Sarge,

what i am not prepared to do is put millions in the hands of lawyers

But you are, in later years, when the house/loan is nearly paid off, prepared to put millions in the hands of your Thai wife. Brave man, I applaud you for that, sort of.

trying to work oracles or loopholes is IMHO pie in the sky and dangerous

A 30 year lease is not a 'loophole', it is recognised under Thai law.

Burger

[sargeant]

on a lease you dont own the land now do you

[sargeant]

On your quote of me you cut out most of the quote especialy yak hearders and betting on thai govt

Which as far as i know doesnt apply to leases lease do not req non voting yak hearders and is ok with the govt

a litte bit back you accused me of misleading people because i did not put the whole quote

an apology is in order

[Wanderlust]

I must say that I am in general agreement with what sargeant says, and with the possible alternative approaches suggested, where the Thai wife gets a loan which you pay the monthly repayments on, or leases the land to you. These seem far more secure routes than the effectively non-trading company set up which could have the rug pulled from under it at any point and leave you having spent a large amount of money in a short time. Of course there is the risk that your wife could do the dirty on you as soon as the loan is repaid, but if that happens it will mean at least 25 years of living comfortably, and without having to put up a large lump sum at the start of it, which is money that can be safely earning interest somewhere.

The point that I am more interested in though (as the original post said), is whether right now, or even the next two years, is a good time to buy property (whichever route you choose) given the number of properties currently available and the number that are still being built? Surely there is an over supply, which at best (for the agents and owners) means a stabilising of prices, and at worst means prices coming down? Combine that with a potential drop in demand due to the perception (or otherwise) that Thailand is not as safe or attractive as before, due to past and present government actions relating to money and visas, and a sequence of other events that have damaged the country's image (tsunami, bird flu, SARS, bombings, military coup), then I have to think that buying property here now is not the wisest thing to do, with asking prices at record highs.

[PeteC]

No promises but I may be able to shed light on that in a few weeks, WL. This week we go to look at a few places we like on the golf course at Eastern Star, in Ban Chang, Rayong province. I plan on hammering them to the ground, as very slow to no buying activity in the place at the moment. Houses are being built without buyers' funds, which is a good thing, and I want to see how hungry they are.

We will walk if they don't want to deal, so this should be fun and informative. We'll see. Pete

[Burger]

Re: The "Having a loan in your wife's name" scenario

This will mean your wife owns the house, not you, and as Sarge said, the Chanote will be held as collateral and you the foreigner can not get a lease on it.
This will leave you with no rights should the relationship go bad and a new man steps in with pockets full of money willing to take over the payments, say 10 years down the line.
No 25 years, no 30 years

The ownership of the house in your name together with a 30 year lease is far safer than the above IMHO.

The company route, no matter how you feel about nominee shareholders etc, the recent new regulation on these List 1 and 2 businesses of the FBA (the most serious one's) look what the Government action was:
Finance Minister Pridiyathorn Devakula said: "Foreign investors who hold more than 50 per cent of voting rights must also reduce their voting rights within two years"

Two years !!! hardly we'll be round next Wednesday to kick you off your land, plenty of time to act, take out a lease etc.

Burger

[johnnyk]

Two years seems like a reasonable grace period to get your affairs reasonably enough in order to keep the authorities happy.
How much time do people need? 10 years, 20?
In a truly awful place like Zimbabwe you would have been given 24 hours at gunpoint to get your arse out of the way.

[Wanderlust]

Re: The "Having a loan in your wife's name" scenario

This will mean your wife owns the house, not you, and as Sarge said, the Chanote will be held as collateral and you the foreigner can not get a lease on it.
This will leave you with no rights should the relationship go bad and a new man steps in with pockets full of money willing to take over the payments, say 10 years down the line.
No 25 years, no 30 years

The ownership of the house in your name together with a 30 year lease is far safer than the above IMHO.

The company route, no matter how you feel about nominee shareholders etc, the recent new regulation on these List 1 and 2 businesses of the FBA (the most serious one's) look what the Government action was:
Finance Minister Pridiyathorn Devakula said: "Foreign investors who hold more than 50 per cent of voting rights must also reduce their voting rights within two years"

Two years !!! hardly we'll be round next Wednesday to kick you off your land, plenty of time to act, take out a lease etc.

Burger

Fair enough Burger, but can I have your thoughts, as a professional in the area, on my other, more important point? Just to reiterate to save you scrolling back it was:

The point that I am more interested in though (as the original post said), is whether right now, or even the next two years, is a good time to buy property (whichever route you choose) given the number of properties currently available and the number that are still being built? Surely there is an over supply, which at best (for the agents and owners) means a stabilising of prices, and at worst means prices coming down? Combine that with a potential drop in demand due to the perception (or otherwise) that Thailand is not as safe or attractive as before, due to past and present government actions relating to money and visas, and a sequence of other events that have damaged the country's image (tsunami, bird flu, SARS, bombings, military coup), then I have to think that buying property here now is not the wisest thing to do, with asking prices at record highs.

[sargeant]

Burgher i will take that as an apology
But i must say you seem to have a real downer on relationships most of my farang friends seem to have pretty stable relationships your paranoia about it seems to speaks more about you than reality
The she buys house cash and then gets a loan means the chanote will be held as collaterall and the bank wont give loan on a chanote with a lease on it either which is the flaw in that plan

wanderlust thanks for your post i was beginning to think i was a alone
you are correct the title of this thread has a simple answer NO if only because there is an over supply an underdemand and if you wait the chances are prices will fall

to recap options
1.rent no problem but rents rise over time
2.Lease no problem but renewal of 30 year lease somewhat up in the air plus 100% of your money tied up
3. company route fraught with danger and full of unknowns still to come plus 100% of your money tied up subject to yak hearders relationship
4. Mortgage in girls name minimum cash at risk 90% of your cash available to you to use for better return subject to relationship but minimum loss if pear shaped

I have a huge problem with the company route and when asked about it my advice for over 3 years has been dont touch it with a 20yard bargepole dipped in rhinocerous dung

The 30 year lease seems a tad short to me but at least it is 100% legal the first guaranteed renewal clause i THINK is quite safe because i believe the law allows for it but a second renewal THAT sounds suspect and guilding the lily and seems to be coming from the same people that said the company route was bulletproof i also have not heard a word about how much these renewals are going to cost and that frightens the living crap out of me

[STEVE G]

I think it’s going to be a buyers market for a while. I notice that the Governor of the Bank of Thailand is predicting a slowdown in the property sector with an over supply of expensive houses.
There is also mention of a drop in interest rates, which I suppose could make the idea of getting a loan in your wife’s name attractive, even if only as an alternative to a long term rental.

[Burger]

Wanderlust Wrote:

Fair enough Burger, but can I have your thoughts, as a professional in the area, on my other, more important point? Just to reiterate to save you scrolling back it was:

The point that I am more interested in though (as the original post said), is whether right now, or even the next two years, is a good time to buy property (whichever route you choose) given the number of properties currently available and the number that are still being built? Surely there is an over supply, which at best (for the agents and owners) means a stabilising of prices, and at worst means prices coming down? Combine that with a potential drop in demand due to the perception (or otherwise) that Thailand is not as safe or attractive as before, due to past and present government actions relating to money and visas, and a sequence of other events that have damaged the country's image (tsunami, bird flu, SARS, bombings, military coup), then I have to think that buying property here now is not the wisest thing to do, with asking prices at record highs.

Yes there is a general feeling of low confidence in Thailand at the moment due to various things you mention, so certainly some uncertain buyers will be put off.

But the perception that prices are sky high at the moment (I'm talking about an average house 3M to 6M) is mainly by locals who live in Thailand, or a few back in Europe with Thai partners who know Thailand and Hua Hin well.
You/they are not the majority of the buyers though, it's all the European's who come over and are amazed at how cheap properties are.
When they see a nice 4M Baht 3 bed, 2 bath bungalow on a nice estate, with security and your own private pool. They can't believe it.
Hua Hin is massively cheaper than Samui or Phuket, they see that and feel Hua Hin is a real bargain.

There's 3 ways it can go:
1) Stays the same and there is not enough bad news around to scare off the buyers at the moment as they're still buying, and most feel positive when told all the recent changes do not affect property.
2) The Government will clampdown on property, then you'll get your crash, cheap houses, developers going bust etc.
3) The Governement make it easy for buyers by relaxing laws/giving longer leases etc, then you will see a big boom and big price increases, ala Samui and Phuket.

This debate about a crash has been going on on this forum for 18 months, anyone who bought a 4M Baht house back then has made a Million Baht as it's worth 5M now.

People have to way up the risk for themselves, I personally am putting my money where my mouth is and still investing as I believe the Governement welcome it (due to all the exemptions property has had from every new regulations).
Plus I've heard that certain banks will be offering 70% mortgages to FOREIGNERS in the near future, which tells me the Government will be issuing longer leases or A.N.Other option.


Burger

[Burger]

deleted

[Mack111]

What is the main reason that Thailand don’t allow foreigners to buy land?

I guess nowadays it is only Asian countries that don’t allow this practice but even some of them are opening up with a one or two house limit

[Winkie]

Mack

I would guess that the reason is because foreigners will push up th eprice of lad, and therefore disturb the 'natural' price of 'Thai Only' land to a point that would casue economic difficulties to a large number of people.

As far as I am aware, Singapore prohibits Foreigners from Purchasing land. Its Condominium Purchasing conditions are also much more strict than Thailand.

Vietnam also prevents foreigners from owning land, and this won't change for some time. The land ownership rules were only ammended oin July 2006 after 11 years of planning. Samething for Cambodia

I'm certain that others in south East Asia are similar, or even more tough than Thailand. Does anyone know the score in Myanmar for example? But then who'd fancy living there!

In fact I've just done a quick scan on the net, and of 10 ASEAN Countries, only Malaysia permits foreigners to buy land. The other 9 do not, and many have much tougher rules relating to the foreign ownership of property (condos etc...)

There are other countries around the world who also prevent land from being sold to foreigners, or subject it strict conditions.

In fact, technically, land can be purchased in Thailand as far as I am aware. However, it is subject to placing a impractically large amount of spare cash into Govt Bonds. I do not know anyone who has done this. Also the provision is provided for the Govt to issue permission for foreigner to buy land. However, I guess that not many have persued this route, and probably its a totally meaningless exercise, however, until its been tried, no one can be sure!

I think it shows that everything is not so bad in Thailand, and conditions are not as Xenophobic as many point out. Perhaps part of the problem is Paranoia, on the part of the posters

Winkie

[Mack111]

thanks for that.

yip i can confirm Malaysia lets you own 2 houses which have to be over a value of 250,000 RM (roughly 2.5 M Baht) in most states and 350,000 RM (roughly 3.5 M Baht) in the state where KL is. this is to prevent people coming in and snapping up all the cheaper houses that were planned for the locals