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Optimism in the Thailand residential property market is apparent since Thailand is currently on its way to economic recovery. Following is information to help you decide if the Thailand residential property market should be part of your investment strategy:

According to Land & Houses, one of Thailand's largest developers, recent reductions in construction costs and declining oil prices are not enough to avoid a slowdown in the Thailand residential property market. The global financial crisis has reduced buyer confidence.

The political turmoil in Thailand is another factor that will reduce buyer confidence in the Thailand residential property market. International investors look for economic stability as part of their investment decision making, such political issues reduce the confidence investors have in the market.

CB Richard Ellis believes the political turmoil over the last 3 years has made investors cautious and resulted in Thailand residential property market not undergoing the degree of development other Asian markets have benefited from. Once the political environment is settled, investors may see Thailand an appealing opportunity and a surge in investment may occur.

Construction of new housing in Bangkok peaked in 1996 with around 127,000 units built. It subsequently declined drastically and even in 2008, new residential property construction was 55% below the peak. Nevertheless, Bangkok is currently experiencing an oversupply of condominiums. The recent success of L.P.N. Development launched mid end projects is likely to spur a number of developers to realign their future products away from the more volatile high end segment and towards to the surging demand for mass residential catering to the expanding middle classes. In December 2009 Bright Sukhumvit 24 was launched with 292 units for sale with unit area of between 64-542 sq m. The developer is Albright Holding and this is the first property development from the previous textile company owner. Five levels have already been constructed in order to create confidence in potential buyers as regards to completion, which is scheduled for December 2011. The Link Sukhumvit 64 was also launched in December with 122 units and unit areas ranging from 40-50.5 sq m. The developer is Tararom Estate Co., Ltd. and is scheduled to be completed in 2011.The Link Sukhumvit 64 was also launched in December with 122 units and unit areas ranging

Because of this oversupply, the occupancy rate of condominiums sharply dropped to 73.1% in Q1 2009, from 90.9% in Q4 2008, according to Colliers International. Several developers’ projects have either been delayed or cancelled due to financial difficulties attributed to the global credit crunch.

Restrictions apply to foreign ownership of Thailand real estate but it is allowed whether the purpose be for residential, commercial real estate, or as a property investment. Foreigners can invest in the Thailand residential property market via purchasing condominiums where the restrictions are that the total foreign ownership within a condominium block cannot exceed 49%, the funds used to buy the property must be remitted from outside of Thailand and be recorded by a Thai bank. prices.

Some developers, including Sena Development, saw a decline in prices for the Thailand residential property in 2009. This was due to a combination of reduced cost of construction material along with the slowing in demand. The prices of raw materials such as steel and cement have fallen significantly in last three months. The reduced costs to developers gives them a potentially bigger margin but also allows them to reduce prices to help maintain demand.

The Bangkok real estate market has remained stable throughout the first half of 2010, despite the political turmoil discouraging foreign property investors. According to DTZ the occupancy rate of CBD offices rose 0.7% in Q2 2010 when compared with Q1. Due to the low interest environment many local investors have found office condominiums and buildings to be a reliable source of income.

Two aspects that help to shield the Thailand residential property market from crashing are:

The banking laws governing property purchase by foreigners - funds used by foreigners to purchase Thailand residential property must come from outside of Thailand. Thailand banks rarely lend more than 70% of the property value to domestic lenders which helps safeguard them against the financial credit issues experienced in the US and UK. Recently, it has ben possible to get finance from a Thai bank. Bangkok Bank is one that has recently set up a branch in Singapore and has options for foreign investors.

The strength of Thailand tourism - Thailand is renowned for its friendly people, cuisine, and spectacular holiday destinations. This is a key reason for the popularity of real estate in areas such as Koh Samui and Phuket, in particular. The upgrade of the Phuket International Airport by 2010 will further support demand for Phuket's residential property market.

Of all the East Asian countries to recover from the economic recession, Thailand has been the last; this lag time presents an investment opportunity. Greater capital inflow, and improved country infrastructure points to a growing real estate market.

Buying Thailand property or selling Thailand property requires payment of certain taxes. To ensure tax obligations are met, Healy Consultants provide professional advice to international investors on the taxation requirements associated with the Thailand residential property market.

Healy Consultants will also appoint and supervise local lawyers to ensure all legal matters are undertaken correctly.

For clients who have invested in Thailand residential property market due to them relocating to Thailand, Healy Consultants assists with immigration services including organizing visas, arranging relocation services, orientation information of Thailand and its culture.

For further information on Thailand residential property market, please contact us at our Singapore office at (+65) 67350120 or email us at info@healyconsultants.com