One of the biggest property stories this week, which has gone largely unnoticed, was an admission from a top property executive that overseas buyers pay more than locals for Bangkok condominiums.
Double pricing for foreigners isn’t new in Thailand, but this public admission that foreign buyers can be paying as much as 20 percent more than Thai buyers has the potential to damage confidence in the minds of overseas buyers.
Prasert Taedullayasatit, Honorary President of the Thai Condominium Association, was quoted in a Bangkok Post story as saying; “A condo project near a mass transit station, for which construction was completed last year, saw healthy transfer among Chinese buyers, though they got a 10 percent to 20 percent higher price than Thai buyers.”
He added that: “A possible issue with Chinese condo ownership is that most Chinese owners may not stay at the unit themselves, but instead rent out to a tour agent or use it as an Airbnb.”
Prasert is also a Chief Executive Officer for Thai property developer Pruksa’s real estate arm.
His mention of Airbnb also adds weight, explained in some of our previous articles, that renting through short-term rental websites in Thailand is not illegal.
Whilst double pricing is not illegal under Thai law there must be ongoing issues as to whether the practice of double pricing is immoral.
Developers will justify these additional costs for foreign buyers through extra marketing costs including overseas property exhibitions. That said, the cost of overseas exhibitions is minimal when compared with condo prices and, surely, should be treated as a cost of sale?
Developer’s might also argue that, in some circumstances, they do not control the prices of units sold to overseas buyers. This is when they sell an entire floor, or a set number of units, to an overseas real estate agency. That agency will be solely responsible for the prices it charges.
Ultimately it is down to overseas buyers to ensure they are paying equal prices through their own due diligence, whether through a Thailand law firm or as part of their own research.
Perhaps one option, to enhance confidence, would be for Thai developers to sign a pledge that they do not endorse or accept double pricing.
Will this happen? Probably not.