Bangkok Post – Real estate rules may resemble those in Singapore

An appeal to keep housing affordable for Thais

The government should ensure that Thais can afford to buy homes and also limit the extent to which foreign properties can be owned only in specific zones, even within a single province, to avoid backlash, a property research firm says.

Vichai Viratkapan, acting director general of the Real Estate Information Centre, said the Thai government could take similar action to that in Singapore, where citizens are assured of affordable housing.

“Despite the city-state being small, Singaporeans welcome foreigners because their government has implemented several policies and measures to ensure they can buy homes. They have never been afraid of foreigners owning properties,” he said.

Some of the policies and measures include the development of social housing, in which apartments are sold at subsidized prices to a wide group of the population.

Singapore has a Central Pension Fund, which is funded by both employees and employers. This fund can be used to cover down payments and monthly mortgage payments.

There are also various housing grants and subsidies in the country that aim to make housing more affordable for different groups of citizens, providing financial assistance to lower and middle-income families to make it easier for them to buy their first home.

To prevent speculative buying and ensure housing prices remain affordable, Singapore has been using cooling measures such as stamp duties on multiple property owners and foreigners, as well as tightening loan-to-value ratio limits.

“Singaporeans are not worried about owning a home, but they are worried about long queues,” said Mr Vichai. “While they allow foreigners to buy flats, they limit each nationality to a certain percentage to prevent domination.”

Some real estate analysts say this approach may not work in Thailand because the country has vast areas of land for apartment development, allowing foreigners from different countries to move around freely and not necessarily live together.

To address concerns about housing affordability for Thais if the foreign ownership quota for condos is expanded to 75%, real estate associations have suggested that the expansion should be allowed only in certain areas, such as districts in Bangkok, Phuket and Pattaya. Revenue generated from taxes or fees charged to foreign buyers in condo projects with the expanded quotas should be paid into a housing fund, the groups said, which can help low- and middle-income Thais borrow mortgages at 0% interest for the first three years, providing a guarantee for the loan.

“Increasing the purchasing power of foreign buyers may be necessary given the weak demand from local buyers, but affordability for Thais must be taken into account,” Mr Vichai said.