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Thailand one of World's Best Countries to Make Property Investment Profit

Jun 13, 2008
The star of Thailand's property market has been consistently rising for the last few years -property investors who bought in Bangkok, Phuket and Koh Samui a few years ago have seen the values of their property quadruple in some cases. The end is not in sight yet, with tax breaks from the government making property investment in Thailand even more attractive, and large firms looking to invest here. However, the fame of property markets in Thailand has grown to a point that investors need to act soon or risk missing out altogether, as the number of opportunities dwindles.

Canny investors have already made incredible profits on property in Thailand. Most of these are expatriate Thai, who keep up to date with current events in the home country and saw opportunities long before they became common knowledge in the more insular West. Prices of property have doubled , tripled and quadrupled for some. The country's economy in general has supported the growth in the property sector, with first quarter growth for the year up 6 per cent on the same quarter last year, and up by nearly six percent on the final quarter of last year. Much of this growth, in the recent past at least, is attributable to government decisions which focus on economic growth as a priority for the country.

One of the most notable firms which has decided to invest in Thailand is Pacific Star.
Daniel Ross is the vice president for business development and direct investment for the company, and he stated "[foreign investors] are global financial institutions, banks and insurance companies who aim high and are happy to invest here. Investing in Thai properties could bring an internal rate of return of 15%". And in fact, many reports suggest that this 15% growth is a gross underestimation. Property prices have risen by 100% in some cases, giving investors in Phuket healthy returns.

One of the other positive factors in the growth of the property market in Thailand is the tax breaks offered by the government. The transfer fees have been reduced from 2% to 0.01%, and the specific business tax has been reduced from 3% to 0.01% until the end of March - effectively they have been reduced to nil to cushion the blow of high construction costs in the region. However, property buyers, as opposed to builders, are not subject to the inflated price of steel rods, concrete etc. These tax breaks are one of the reasons that investors must act quickly -when the taxes resume at the end of March 2009, property investment in Thailand will become much less economical.

The condominium market has been reported as being one of the most attractive buys in the region. Bangkok condos are among the most affordable in major Asian cities, not only in Thailand. Bangkok's average price per square meter of condo space is almost ten percent that of space in Singapore or Hong Kong.

Some investors have shied away from Thailand because of fears over the high rate of inflation. However, the IIF (Institute of International Finance), says that these fears are mostly unfounded. They expect the problem to subside in the near future, and say that worry over the situation has been exaggerated.

There are strict ownership criteria currently in place for Thai property, however foreign investors do have access to the great opportunities through the use of local businesses.
About the Author
Gregory Smyth is an independent author providing assessment and comments on leading International Property Consultants in Asia and Greater China , especially CB Richard Ellis.
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