There has been a strong urge from the people in the property sector to the country's newly-elected democratic government to be more generous towards foreign property investors. Thailand going back to democracy after a 15 month military rule has already had a positive impact on the property market. There have been a notable number of deals completing during the high season in Phuket as well as more visitors to the sole agency projects. The newly elected government has begun to take initiatives toward a more open and favorable policy for foreign property investors. The new government has already taken away the 30% capital control which is thought to support bringing back foreign investments.
The issuing of the new tax incentive package is also an attractive move for the property market. This is anticipated to fuel market sentiments on both the demand and supply side. Property Transfer fee will be decreased from 2% to 0.01% and Specific Business Tax for property transactions will be decreased from 3% to 0.1%. Reliability in the market could be improved further by longer lease terms, stretching from the current 30 years to 90 years. The beginning of business lending to foreign property investors should also be considered by the government. Policies like these would enable Thailand to keep pace with its emerging neighbors, Vietnam and Malaysia, relating to property purchase terms. It is expected that there will a more encouraging outlook for the Thai property market in 2008 than in 2007.
The general election will not be sudden solution for Thailand's problems but it helps the country to enter a path to recovery. This is shown by the facts that despite recent political reversal, the Bangkok luxury residential market still profited last year. Apart from this high-end condominiums in major CBD locations did a good job consistently. In Thailand resorts, land prices remained to surge in 2007 and transaction values began to rise in the fourth quarter of 2007. Phuket is the most energetic resort property market in Thailand exhibiting a 59% increase in transaction value q-o-q.
Since the December election, foreign investors have shown increased interest. Established developments have witnessed a particularly alive high season. Newly awarded projects have also met with a positive response. A similar trend is witnessed in Samui with a clear rise in visiting and purchases of resort properties. It is anticipated that there will be further demand in Samui with surge in flight schedules. The Samui market for luxury villas is closing on Phuket, with the establishment of international hotel brands wooing quality tourism. Samui has traditionally been a less favored beach destination, but this not at all the case now as it is emerging rapidly as a beach destination. Lot of high net worth investors is now increasingly keen.
The Treasury Department's recent land value appraisal displayed that land values in Phuket have rose by an average 160 per cent over the past four years, with Samui prices following closely. The steady rise in land prices on Thailand's coast points to the confidence in the market and its long term prospects. There is no doubt that Thailand's property market is continuously flourishing. Foreign investors will have a good time investing in Thailand from now onwards. If you are ready to forget the unfriendly past of Thailand and show renewed faith you are set to benefit.
