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The Thailand property market gives international entrepreneurs potential for lucrative investment opportunities. Thailand experienced positive growth during 2010, with GDP growing approximately 7.5%, which shows it’s progressing from the global financial crisis. The following will help you determine whether the Thailand property market should be part of your investment strategy:

The Thailand property market is not as reliant on the availability of debt finance like western markets such as the US and Europe. Thai banks follow strict lending approval guidelines where loans are given close to the full value of the property. Domestically, Thai property loans rarely exceed 70% of the banks valuation of a property. Foreigners are required to give evidence that the funds have been brought into the country to finance the purchase price so mortgages are not required.

Restrictions apply, but foreigners are able to invest in the Thailand property market, whether the purpose is for residential real estate, commercial real estate, or as a property investment. Purchasing condominiums is a common way for foreigners to enter the Thailand property market. The main restriction is that the total foreign ownership within a condominium block cannot exceed 49% and the funds used for the purchase must be brought into the country and recorded by a Thai bank.

The inflation rate is an economic indicator that could have an impact on the Thailand Property Market. Thailand's inflation rate as of February 2011 is 3.0%, down from 3.4% in 2010 (Trading Economics).

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The political problems in Thailand have had a negative impact on the confidence of foreign investors in the Thailand property market, especially in the Bangkok property market. Tourism plays a key role in the Thailand property market.

The Bank of Thailand predicts that Thailand's economy is predicted to grow by 3% to 5% in 2011. However the central bank's Monetary Policy Committee anticipates more inflationary pressure in 2011, mainly from higher production costs for manufacturers due to higher prices of raw materials as a result of global oil and commodities price rises and the increase in the daily minimum wage of factory workers. Optimism grows as exportation and employment inclines, however the Thai economy is still vulnerable to changes in foreign importation and political conflict could hinder Thailand's growth.

Thailand has taken the longest, of all the East Asian countries to recover from the economic recession; this lag time presents an investment opportunity. Greater capital inflow, and improved country infrastructure throughout the next several years brightens the investment appeal.

In March 2008, the Thai government implemented reductions in mortgage fees, transfer fees and certain business taxes to maintain and improve developer confidence and provide support for the Thailand property market. The initiatives were originally for 1 year but the slowdown in the market has led to the government to consider extending the expiry date to maintain transaction levels in the Thailand property market.

Taxes are applicable for transactions in the Thailand property market. There are specific taxes for buying Thailand property or selling Thailand property and the buyer and seller can negotiate on who pays these taxes. The taxes involved include income/withholding tax, stamp duty, transfer fee, specific business tax, land tax and structures usage tax. Healy Consultants advise international investors on the taxation requirements associated with Thailand real estate.

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Growth in areas of the market such as Phuket, will depend on continued strength of the tourism industry, along with government initiatives to encourage investment.

For further information on the Thailand property market, telephone us at our Singapore office (+65) 6735 0120 or contact email@healyconsultants.com