Bangkok--18 Jul--CB Richard Ellis
For the last 30 years South East Asian countries have competed to attract tourists. Today the focus is on quality not just
quantity. Part of this strategy is to attract retirement and second home (RSH) purchasers, according to a recent report from CB Richard
Ellis Thailand.
RSH purchasers have become major components in the tourism and property markets in Spain, Florida and Australia’s gold coast. The
RSH market is growing in South East Asia. Competition between countries is intensifying but significant obstacles still remain in particular
foreign ownership of property, availability of property loans for foreigner, and visas.
The benefits of the RSH market are that once a property is purchased, repeat visits by the buyer are guaranteed avoiding the
growing competition to attract tourists. The length of stay is longer and more money is spent on local goods and services.
Thailand has been at the forefront of retirement and second home development centred in Phuket and the Andaman coast, Pattaya, Hua
Hin, Cha Am, and Koh Samui. Thailand offers an attractive combination of quality of living compared to cost but still has restrictive
property ownership rules. Thailand is facing growing competition from Singapore, Malaysia, Indonesia and Vietnam to attract RSH purchasers.
Malaysia has been the most aggressive country in providing an attractive property ownership, property financing and visa
structure. The “Malaysia My Second Home Programme” allows foreign ownership of land with houses, the ability for foreigners to borrow money
to fund a property purchase and a ten year visa. In 2006, 8,700 people had successfully applied for the “Malaysia My Second Home Programme”
Singapore as well as developing two integrated resorts with casinos to attract visitors also has Sentosa Cove, a resort
development aimed specifically at foreigners. Overseas buyers are permitted to own a 99-year lease for land with houses. This is the only
place in Singapore where foreign land ownership is permitted although there is no restriction on foreign ownership of condominium
developments. Vietnam allows foreigners 50-year leases.
The RSH market is destined to grow driven not only by expatriates working in Asia, but also by Asian buyers. Thailand has enjoyed
huge growth in medical tourism driven by Middle East and South Asian demand for good quality, reasonably priced medical care. These medical
tourists could also become RSH purchasers particularly as countries like India look at relaxing controls on investment overseas.
“Thailand faces growing competition to attract RSH purchasers from other countries that can offer an attractive combination of
quality and cost of living. This competition means that, in order to succeed, countries will have to offer attractive property ownership,
property financing and visa regulations,” according to Mr. James Pitchon, Executive Director at CB Richard Ellis Thailand.
Thailand has introduced a retirement visa and about 12,000 foreigners had successfully applied in the first seven months of 2006.
Top Five Expatriate Nationalities in Thailand under Retirement Visa
2002 2003 2004 2005 7M06
Country Number Country Number Country Number Country Number Country Number
Japanese 32 Chinese 646 American 1,232 Chinese 1,834 Chinese 2,217
India 23 American 469 Chinese 1,146 British 1,597 American 2,098
Chinese 22 British 358 British 1,111 American 1,490 British 1,265
Malaysia 11 German 330 German 793 Japanese 865 German 1,185
Australian 8 Japanese 221 Japanese 628 German 850 Japanese 802
Others 37 Others 1,401 Others 2,980 Others 4,037 Others 4,525
Total 133 Total 3,425 Total 7,890 Total 10,673 Total 12,092
Source: Immigration Bureau
The RSH market will to continue to grow. The strongest growth will be from Asian buyers. In 2007, the Korean government relaxed
conditions for Korean nationals investing in property overseas and CB Richard Ellis has already seen an increase in Korean demand for Thai
property. India has also relaxed its conditions for its nationals investing overseas.
As the market becomes more competitive countries will need to examine property ownership and financing restrictions as well as
visa policies to fully benefit from the booming RSH market.
About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), an S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real
estate services firm (in terms of 2006 revenue). With over 29,000 employees*, the Company serves real estate owners, investors and occupiers
through more than 300 offices worldwide.
CB Richard Ellis established an office in Bangkok in 1988 and in Phuket in 2004. CB Richard Ellis (Thailand) Co., Ltd. has grown
to be a leading real estate services provider, offering a full range of services including sales and leasing for all types of property,
property and facilities management, valuation and advisory, and research and consulting. For more information, visit the company's website
at www.cbre.co.th.