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Political calm attracts foreign buyers

August 22, 2011

The peaceful outcome of the election has sparked renewed interest from institutional investors scared away from the local property market ever since the 2008 airport closures, with at least three deals in Bangkok and Phuket worth 5 billion baht possible by year-end.

in Pattaya tourist numbers are up with some high end resorts and hotels reporting occupancy rates of 95 per cent.

Longlom Bunnag, chairman of Jones Lang LaSalle (Thailand), said institutional investors began trickling back a few weeks after the previous government called the election. “They thought it a good sign for the country,” he said at an industry event sponsored by Property Report Live last week.

“Now having visited us again, they plan to return to resume their investment, as the new government looks good. Thailand actually has had nothing wrong with it besides politics.”

All of the buyers are Hong Kong and Singaporean funds that feel now is a good time to take advantage of Thailand’s promising yield outlook. At the same time, property owners have no problems with their assets and believe prices are right. Some want to liquidate.

Patima Jeerapaet, managing director of the property consultant firm, Colliers International Thailand said that especially in Pattaya tourist numbers are up with some high end resorts and hotels reporting occupancy rates of 95 per cent. The hope is that tourist numbers will drive property sales in the area.

Patima said South Korean, Chinese, Australian, Indian and Middle East tourists were fueling the boom, some of them equaling the numbers of more traditional tourists such Japanese, Germans, British, Taiwanese, Americans and Singaporeans.

“Buyers from the Middle East, India, Russia and China are looking at Thailand. Some Chinese investors have bought a block of condos on Ratchadaphisek Road, while Russians are eyeing Pattaya and Phuket,” Patima said.

Topping the list are Indians, Chinese and Middle East residents, especially during the low season.

Medical tourism is a focus, as more than 60% of visitors coming for treatment are from the Middle East.

Colliers’ research shows the number of expats in Thailand excluding employees rose to 157,379 as of June 30 from 116,063 at the end of last year.

Despite the bright outlook, some obstacles remains in the market. They include insufficient financing for foreigners, domestic politics and limited leasehold and ownership structures. Patima said the property committee of the Joint Foreign Chambers of Commerce was updating a white paper that proposes extending leaseholds from 30 years to 60 years and was confident that PM Yingluck, who has a background in real estate, would welcome the proposal.

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