Bangkok--20 Dec--CB Richard Ellis
Ms. Aliwassa Pathnadabutr, Managing Director of CB Richard Ellis Thailand, leading international property consultants, said, “We had still not received clarification from the Bank of Thailand on how the restrictions on short-term capital flow will affect foreign purchasers of condominiums in Thailand”
If foreigners are required to deposit 30% of their purchase price with Bank of Thailand for one year without interest, this would be very damaging to the condominium market and present a significant barrier to demand for condominium from foreigner purchasers.
Property is a reasonably illiquid asset that takes longer to purchase and to sell than shares bonds and other financial instruments. Property is not a short-term investment and therefore should not be targeted in an effort to control short-term capital inflow. Any additional paper work or approval to purchase a condominium will restrict demand and may be impractical to implement because of timing issue.
For example, requiring Bank of Thailand approval to pay a non refundable initial down-payment would significantly impact the sale process. There are thousands of transaction which are ongoing where initial down-payment has been made or contract has been signed for project under construction where purchasers are making monthly stage payment.
“We have been contacted by many foreigners who are concerned about not only how these regulations will affect their property purchases, but also what the effect will be on a medium to long-term to the condominium market,” added Ms. Aliwassa.
Ms. Aliwassa urges the Bank of Thailand to clarify how these regulations will affect existing and future purchasers and what effect these regulations on the Thai property market. As property is not a short-term investment, she recommends the regulations on incoming capital should not apply to property.