Thailand Government Reviews Foreign Condo Ownership Quota
Deputy PM Phumtham Considers Raising Cap to 75% and Extending Lease Periods
The Thai government is set to explore the possibility of increasing the foreign ownership quota in condominiums from the current 49% to 75%, Deputy Prime Minister Phumtham Wechayachai announced.
Additionally, the Ministry of Interior has been tasked with evaluating the potential benefits of extending the leasehold period for foreigners from 50 years to 99 years, Mr. Phumtham revealed to reporters on Friday.
This proposal, initially brought up in a cabinet meeting in April, aims to stimulate economic growth and attract more foreign investment.
Local property industry leaders have long advocated for a higher foreign ownership cap, citing growing demand from international buyers. Concurrently, domestic demand for properties has been hindered by high household debt and stricter lending conditions, prompting developers to adopt a more cautious approach.
The Real Estate Information Center (REIC) reported a 19.7% decline in land allocation permits nationwide in the first quarter of this year, marking the largest drop in nine quarters. This decline follows consecutive decreases in low-rise house transfers, causing developers to reassess their strategies.
The REIC also noted that foreign ownership quotas for condominiums in popular areas like Phuket and Pattaya are fully occupied in many projects.
"Certain locations do not attract domestic buyers, so the government should increase foreign ownership quotas in those areas to stimulate the economy, as the condo market in such locations depends heavily on foreign demand," said Vichai Viratkapan, the acting director-general of the REIC.
Some developers have responded by designating units in each project for leasehold contracts, priced 10-15% lower than freehold units, to accommodate the majority of foreign buyers.
In 2023, the number of condo transfers to foreigners totaled 14,449 units, a 25% increase from the previous year. The value of these transfers rose by 23.5% to 73.1 billion baht, surpassing pre-pandemic levels. Chinese buyers dominated, accounting for 45.8% of the total units and 46.7% of the total value, followed by buyers from Russia, the United States, and Myanmar.
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