Thailand Still Attracting Foreign Funds
According to the Housing Finance Association, the Baht’s pullback and the numerous incentives given by Thai property developers have encouraged foreigners to purchase more and more properties in the Kingdom.
For the association, it is difficult to put figures on the foreign demand as they are mostly cash buyers and do not require any mortgages from banks or other private financial institutions to finance their investment.
Regarding local investor, demand is also increasing considerably as they expect better gains from real estate investments than what they would get with regular savings. The sluggish economy has made interest rates pretty low and cannot compete with the 5.5-7% return a condominium provides here.
As of March 2015, the total mortgage value for home buyers represents THB2.89 trillion, which represents a significant 10% growth year-on-year. New mortgages including refinancing are expected to reach as much as THB600 million in 2015, up 4.34% from 2014. Finally, although banks got stricter in approving loans to regulate the market, rejection rate remains pretty low at 20-30%.
Real estate investments are thought to represent over THB960 billion this year. New loans issued shall reach THB640 billion, thus leaving a THB320 billion gap to be filled by property buyers with cash money.