When potential investors or homebuyers contact our Agency, many are at a crossroad in their lives. These property seekers are faced with the daunting question:
Should they invest in a Bangkok condo/ house?
Considering the rapidly increasing price of real estate in Bangkok, their uncertainty is understandable. Being cautious is important, especially in the Capital’s expansive and oftentimes overwhelming real estate market.
Buying a property is a large financial commitment with its unique set of responsibilities, risks, and rewards. Therefore, this article will offer an impartial evaluation of the advantages and disadvantages of property ownership in Bangkok!
Pros of Buying Property in Bangkok
1. Foreigners Can Own Freehold Condos.
“Condominiums” (Condos), are a “legal title” that foreign nationals can purchase directly on a freehold basis. Non-Thais can therefore own, resell or pass-on condos in Thailand without any restrictions. This straightforward property ownership law has allowed the condominium market especially in Bangkok to develop and grow rapidly!
2. Rental Returns and Capital Appreciation Potential
Bangkok is an important business hub for Thailand and South East Asia as a result there is an active rental and resale property market!
Potential investors can on average make 4-6% gross rental yield on condos in Central Bangkok. On top of this, Bangkok property prices have been appreciating as a result of city development and economic growth.
3. High-Quality Residential Projects
In recent years, developers have actively launched a series of residential projects, resulting in fierce inter-developer competition. A positive product of this competition is increasingly high-quality residential developments that offer a huge selection of facilities. Bangkok developments now often include luxury facilities such as pools, gyms, libraries and even rooftop garden spaces as a standard!
4. Amazing Bangkok Lifestyle
Bangkok is a global lifestyle destination as it offers an amazing wealth of things to do, see and experience. The city harbors a desirable residential appeal like no other; from shopping malls, world-class dining, trendy bars, hip clubs and deep cultural heritage.
On top of this, the city is a regional economic hub with plenty of commercial and career opportunities for working professionals. This “work-life” balance is the reason why Bangkok is a popular investment destination for expats and overseas investors!
Cons of Buying Property in Bangkok
1. Foreign Nationals Cannot Own Land
While foreigners can own “Condominiums” (Condos) on a freehold basis, it is important to note that they cannot own land. Therefore, they are unable to own landed property (I.e. Villas, Townhouses, Houses) directly under their name. This can make acquiring any form of landed property a complicated ownership proposition.
2. Buying Cash and Limited Financing
Most foreign buyers need to buy property cash, as local financial institutions generally do not offer financing to non-Thais. This means that buying property in Bangkok can be quite a large financial commitment.
3. Secondhand Property Market Can Be “Illiquid”
While there is an active resale market especially in Central Bangkok, the Capital also has a large supply of condos (Completed and Under Construction). This as a result, dilutes demand, with resellers competing for the attention of buyers.
Bangkok’s property market is unfortunately not as liquid as real estate in developed markets such as London or New York. Therefore, finding a buyer and negotiating a potential exchange can take months, with no specific timeline on completion/transfer.
4. Immigration Laws & Regulations
Thai Immigration offers several different types of long-stay visas from business/work visas, retirement visas and even investment visas.
However, arguably these visa types have strict and sometimes prohibitively high application requirements. This can make it difficult for some foreign nationals to apply for long-term visa status and as a result it can be difficult to live long-term in Thailand!
Should you buy property in Bangkok?
On a final note, buying property is a highly personal decision that needs to be based on the buyer’s personal and financial situation. From an investment perspective, Thailand and by extension Bangkok’s economic and market fundamentals are stable!
However, Fresh’s editorial would like to emphasize that buyers should consider investing only if they have a strong financial position. Also, buyers should ensure they have a “long-term investment horizon” (Minimum 3-5 years ownership).
This would in effect, allow buyers to benefit from a combination of rental income and/or potential capital appreciation!