BoT move to stop THB speculation

[PeteC]

This article fromthe Business section of the Bangkok Post this morning seems to indicate there is stillconfusion and problems. Pete
_____________________________________

Property firms seek clarity on foreign buying
NINA SUEBSUKCHAROEN

The Bank of Thailand's tough capital controls, although slightly eased after the stock market crashed on Tuesday, are scaring off foreign property buyers and will add further pressure to the market, says a local lawyer with many foreign and expatriate clients.

Under the new rules, foreigners who want to buy a leasehold property in Thailand will have no problem doing so if they can bring in Thai baht for the purpose, said Sally Ann Lefley, an associate at the Bangkok-based firm McEvily & Collins.

However, those buying freehold property, such as condominiums, will see the Bank of Thailand retain 30% of foreign funds interest-free for one year.

Ms Lefley also said that even though Thai authorities are trying to stop foreigners from setting up Thai companies to buy land and houses, those who manage to do so can buy landed real estate without having to deposit 30% with the central bank by using baht for the transaction.

James Pitchon, executive director of CB Richard Ellis, said yesterday that the central bank needed to further clarify how the controls on foreign capital inflows would affect foreign property buyers.

''We are still unclear whether it will affect overseas buyers,'' he said.

Should foreign real estate buyers have to deposit 30% of the purchase price with the Bank of Thailand for one year, it would be extremely damaging, Mr Pitchon added.

He said property was not a short-term speculative investment but a medium- to long-term one with most people buying houses and condominiums to live in. For this reason, funds used to buy property are not ''hot money'' as it cannot be sold quickly. By nature, property is illiquid.Mr Pitchon added that even if a 30% deposit with the central bank was not required, more paperwork generated by the new rules would still hurt the market.

Aliwassa Pathnadabutr, CBRE's managing director, added: ''We've been contacted by many foreigners who are concerned about not only how these regulations will affect their property purchases, but also what the effect will be in the medium to long term on the condominium market.''

Ms Lefley said that investors should simply look to lease land because the government has been enforcing regulations that restrict foreigners from setting up companies to buy land.

''Just totally forget about trying to buy land through a Thai company,'' she said. ''Things have taken place since the coup; it got very, very strict thereafter. So if a Thai company wants to buy a piece of land now, if it's 100% Thai, it's no problem. But if there is a foreign shareholder or director then the Land Office will investigate that company and check if the Thai shareholders are actually nominees for the foreign director or shareholder.''

The maximum term of a lease in Thailand is 30 years and Thai law allows one renewal of 30 years.

''You can still buy a house or a villa; it's just the land that you can't actually buy,'' Ms Lefley said. ''So you can choose to lease the house as well as the land or you can choose to buy the house outright.''

However, she cautioned that once the lease expires, the house, unless the lease agreement says otherwise, would actually become the property of the landowner.

''So whereas before sellers and buyers were concentrating more on freehold aspects, it seems that the sellers now are really getting to grips with leases and putting in more provisions, not only to protect themselves but also to protect the lessees,'' she said.

Even so, Ms Lefley noted that foreigners are not shying away from buying land and houses as her law firm had feared.

''It seems more and more are quite accepting of the option to lease. They don't seem too concerned about owning a freehold so that they can pass it on to their family when they die; it seems a lot are looking at using the property for themselves and not looking to pass it down.''

[sargeant]

Fine Up to you but he was part of a 3 way interview and was telling the interviewer what the Dep PM said and specifically stated the new property regs still applied the Dep PM could have jumped in and clarified it if it was wrong
now that was his words not mine i have been at pains to neither comment guess or speculate what it was all about

But it is a fact he said it worldwide

As i say i have no nil zero buggerall vested interest full stop
It will also not effect me one iota full stop

I will only say that IMHO i would wait until it is clarified properly
Do i listen to the Dep PM of thailand, A Bloomberg anylist or a BOT Tele operator

Your call
I aint buying or selling nuffin but if was i would not cos its as clear as mud and they are all on different pages and it sure as crap was not a full U turn

[Burger]

but he was part of a 3 way interview and was telling the interviewer what the Dep PM said and specifically stated the new property regs still applied the Dep PM could have jumped in and clarified it if it was wrong
now that was his words not mine

No it was only a 2 way interview between deputy PM and the Bloomberg interviewer. It's on Bloomberg's website if you want to listen to it.

Bloomberg website Link: http://www.bloomberg.com/

Interview link: http://www.bloomberg.com/avp/avp.asxx?c ... g7_1LU.asf

Burger

[sargeant]

I am not getting into an argument over it because as i say i have no interest at all in it i posted it because it was said and i watched it all the way through and posted it to help whether it was the Dep PM the anylist explaining the Dep PM or just the anylist blowing wind out of his bum i dont know and i dont care but it was said and broadcast worldwide

the new regulations still apply to property (whatever that means)

I have told you i cant get your link up i tryed but i was bored sh$#less with it the first time and i dont want to hear it again

If anyone is effected i am sure they will be able too uplink it download it do what they like to it they can also read petes post and make up their own minds

It is still as clear as mud and they are still on different planets getting finicky about what colour knickers the interviewer the Dep PM and the anylist were wearing aint informing nobody
The problem is certain shady peops out in town are not telling anything like the true picture and the more factual provable the info small as it maybe the better

[buksida]

Property issues aside the new government has made themselves look pretty stupid, its going to take a while before foreign investors (both large and small) regain confidence.

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