Singapore buyers and investors should ensure they fully understand every aspect of buying property in Thailand before putting pen to paper.
Several real estate firms in the city-state have been promoting Bangkok property to investors in light of the recent cooling measures that have been imposed.
While Bangkok does represent an alternative property investment destination for Singaporean buyers, and has done for many years, marketing messages do need to be verified for accuracy.
In one recent example, an agent working for Singapore’s largest real estate firm painted a fantastic picture of Bangkok property investments.
According to the agent, luxurious freehold properties are available in prime Bangkok locations for less than S$2,000 per sq ft (THB 49,000 per sq ft), or more than THB 500,000 per sqm.
Whilst this is undeniably true, enquiries determined the properties being marketed to Singaporeans are well outside what is considered to be central Bangkok, and certainly not in locations that are currently deemed to be popular with expatriate tenants.
One project is deep within Soi Ekkamai whilst another is in Bang Chak, near On Nut, with more than 1,300 units as part of the development. Neither location is prime; most real estate agencies would define these areas as suburban Bangkok.
The suggested rental yields of between 5 percent and 6 percent would be difficult, but not impossible, to achieve once all expenses and taxes are taken into account. Average rental yields for Bangkok as a whole are currently around 4 percent, according to recent research from Thailand’s Agency for Real Estate Affairs.
The marketing also says there are no restrictions on foreign buyers – without mentioning the foreign quota requirements that stipulate that only 49 percent of available space can be owned by non-Thais in any property development.
It also says that buying property in Thailand is easy to enter and exit. Whilst buying property in Thailand as a foreigner is not difficult, exiting may not be quick or easy. If you buy a good unit in a good location it should be easier to sell when the time comes.
If you intend to buy Bangkok property, we would strongly suggest having a medium- to long-term outlook for your investment, and that you use the services of an independent law firm that focuses on Thailand property.
Never sign anything you do not understand.
Buying for a quick profit may have been fashionable and possible five years ago but in today’s market that’s very unlikely to happen.
Prices, the marketing says, start from S$ 280,000. That’s THB 6.8 million for the Ekkamai property.
For this location we feel that price is high.
Small units are on the market for slightly more than THB 5 million for the Ekkamai project and in the region of THB 3.2 million for the Bang Chak property.
Finally, the marketing also suggests that finance is available for Singapore buyers both at home and in Thailand. The latter is technically possible but not from a bank and interest rates for foreigners will far outweigh the rental yield.
That said, some banks in Singapore do offer finance for Thailand property purchases to qualifying individuals and for pre-approved projects with established developers.
Our advice to Singapore buyers looking at Bangkok is:
- Define expectations and goals for your Bangkok property investment.
- Plan a short trip to see what is available. Get a feel for the city and where you want to own your investment property.
- Do your research about Thailand’s property laws and how the market is performing.
- Do your research about developers in your chosen area.
- Do you research about planned infrastructure developments in your chosen area.
- Talk to different agents in Singapore and Bangkok who focus on your chosen area. Unlike Singapore there is no regulation of real estate agents in Thailand so try to get recommendations from other Thai property buyers.
- Engage an experienced Thailand property law firm.
Bangkok does offer some attractive property investment options for Singapore buyers, but ensure you have a complete picture of your planned investment from every possible angle.
For free, unbiased information with no obligations about the current state of the Bangkok property market, you can contact us by email at firstname.lastname@example.org.