sound investment (really?)

Post by **tuktukmike** » Thu Dec 21, 2006 11:33 pm

Thursday December 21, 2006

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.''

dsfbrit

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Post by **Jim** » Fri Dec 22, 2006 2:23 am

and a very merry Christmas to you too

Post by **Burger** » Fri Dec 22, 2006 2:48 am

Nice try Mike, looks like this one lasted all of 5 minutes:

Link: http://yahoo.reuters.com/news/articlehy ... ews&rpc=44

BANGKOK, Dec 21 (Reuters) - Thailand's central bank has issued a list of exceptions to the capital controls it imposed this week to curb speculation in the baht, Asia's fastest-rising currency.
Following are transactions exempted from the requirement that 30 percent of all inflows without an underlying transaction be deposited with the central bank for a year without interest. The bank would keep one-third of that if the money was withdrawn earlier.

* Foreign currencies bought or exchanged against baht for investments in the Stock Exchange of Thailand (not including mutual fund units), the Market for Alternative Investment, the Thailand Futures Exchange and the Agricultural Futures Exchange of Thailand.

* Foreign exchange transactions for the settlement of stocks, bonds and futures traded prior to Dec 19, 2006.

* Foreign direct investments, including long-term investments by non residents -- both personal and corporate -- if they own at least 10 percent of the business and help manage it, including the purchase of property such as land and condominiums.

* Foreign currencies bought from customers or authorised dealers in the form of travellers cheques and notes.

* Foreign currencies bought from foreign exchange rollover swap transactions made with the same financial institutions.

* Foreign currencies bought from Thai embassies and consulates outside Thailand, as well as foreign embassies, consulates or international organisations located in Thailand.

* Foreign currencies bought from government agencies.

* Foreign currencies bought from Thais holding foreign currency deposit accounts and wanting to exchange them into baht if they can prove the deposits are exempted from the measure such as foreign currencies paid for goods and services. Source: Bank of Thailand

Post by **Burger** » Fri Dec 22, 2006 2:49 am

Or this one:

Link: http://yahoo.reuters.com/news/articlehy ... ews&rpc=44

REUTERS Thai property exempt from baht curbs-central bank [GQLYDPG]

BANGKOK, Dec 21 (Reuters) - Foreigners buying luxury condos
and beach-side villas in Thailand are exempt from a new capital
control aimed at reining in a surging baht, central bank governor
Tarisa Watanagase said on Thursday.
Developers had feared the restriction imposed on Monday,
requiring 30 percent of non-trade related foreign exchange to be
deposited interest free with Bank of Thailand for one year, would
scare off foreign clients.
But Tarisa said the measure was aimed at short-term
speculative inflows, not money with an "underlying transaction."
"For example, foreign direct investment, proceeds from
exports, investment in property and things like that. They are
not required" to comply with the new rule, she told Reuters.
Thailand has enjoyed a property boom fuelled partly by
foreigners eyeing holiday or retirement homes on its sun-drenched
beaches or plush Bangkok apartments that cost far less than
comparable units in Singapore, Hong Kong or Tokyo.
The Sept. 19 bloodless coup that ousted Prime Minister
Thaksin Shinawatra barely dented enthusiasm for Thai property,
developers say.
But they say the bungled baht controls, which triggered a
massive sell-off of Thai stocks and shattered confidence in
post-coup economic team, has damaged the country's image.
"Building up confidence is not going to happen over night.
The Bank of Thailand really has to do more to clarify any other
obscure measures they imposed," Nigel Cornick, chief executive of
developer Raimon Land, told Reuters.
"From what I see, the attempt to bring the baht more in line
(with other currencies) has been well over the top," he said.

Post by **hogus** » Fri Dec 22, 2006 4:06 am

Sure! Come on everybody! Invest your money in lovely Thailand!

Of course, you should accept that 30% of your cash-inflow could/will be deposited in our central bank without any percents for 12 months, but we offer you another chance, too.

Buy land & houses!

Well, you canâ€™t own them according to your western criteria, but you are just a stupid Farang and love to waste your money!
Keep in mindâ€¦itâ€™s â€œAmazing Thailandâ€

Post by **johnnyk** » Fri Dec 22, 2006 4:29 am

ASIA: Thailand
Thai markets rout
Thailand reverses clumsy efforts to curb speculators

http://www.economist.com/daily/news/dis ... id=8459519

Post by **caller** » Fri Dec 22, 2006 6:36 am

Surely the point is not what's in, or isn't, who said what last, or retracted the same, if you get my drift? The point is who can trust a Country and economy that at the drop of a hat, with no prior warning, can introduce then change such measures, all within the space of 48 hours.

Hello, is there anyone there running things? Will my money be safe, what do you have planned for next week, month and year?

Can I get my 30x30, or will that change as well, and if I do invest, will you retrosopectively tell me that 30% of my dosh stays with you earning you, not me, interest and, er, sorry to ask, but will I get it back (please)?

What the f**k is going on!?!?!

Seems like the lunatics have taken over the asylum?!

Ltes see what the situation is like in 12 months.

Post by **Randy Cornhole** » Fri Dec 22, 2006 11:12 am

Rent.

Post by **buksida** » Fri Dec 22, 2006 11:21 am

You boys dragging up this old battle again?

I'll say the same as I always do to people considering property purchases in this country - don't spend what you can't afford to lose.

And yes, come here and rent first.

Post by **Burger** » Fri Dec 22, 2006 11:24 am

Agree with that, rent first while you decide if and where you want to buy.

Nothing to drag up here Buksi, it was a non-story from the start. People should read and understand this issues first

Burger

Post by **caller** » Fri Dec 22, 2006 3:20 pm

Burger wrote: People should read and understand this issues first

Burger

Thats what I've done and it was hardly a non-story, was it?

sargeant · Post by **sargeant** » Fri Dec 22, 2006 4:07 pm

Caller as for the isues i dont have a clue as for the legal jargon i dont care

I do however undestand that in the present economic and political climate come and rent and wait and see is the only sensible way and the only honest advice anyone can give

Post by **Burger** » Fri Dec 22, 2006 4:12 pm

I was saying it was a non-story from the start regarding property because it was always exempt from this new 30% rule from the offset, ie: before any 'U-turn', as stated on paragraph 2 of the original BoT regulation below:
Link: http://www.bot.or.th/bothomepage/Genera ... n5149e.htm

The regulation states it was for 'short-term captial inflows' and that payments for goods and services were exempt.
How anyone can interpret buying a property as a 'short-term inflow' rather than employing the services of a Thai company, is beyond me.

As per usual people did not wait for clarification from the Government but were reading the unsubstantiated panick-mongering posts off TV forum and the paper's headlines.

I don't mean you here Caller, as you read the resultant stories people posted elsewhere on the forum.

Today's papers have competely opposite views now that clarification has been received . Surprise, surprise, where's our Cilla ?

Burger

Post by **skandii** » Sat Dec 23, 2006 1:30 pm

Take good, solid and sound advice, these turkey's live in the land of nod. They can tell you where to get the cheapest bottle of Chang or the latest bus fare to Bangkok but thats as far as it go'es. Spend most of their time on two wheels looking over their shoulder for site of immigration officers.

Invest in a Third World Country and prepare for a loss.

Post by **DawnHRD** » Sat Dec 23, 2006 3:40 pm

skandii wrote:Take good, solid and sound advice, these turkey's live in the land of nod. They can tell you where to get the cheapest bottle of Chang or the latest bus fare to Bangkok but thats as far as it go'es. Spend most of their time on two wheels looking over their shoulder for site of immigration officers.

Skandii,

I am perfectly sure that you do not have anything to back up your statement about our members' immigration status, so to say it is libellous. As for your opinion as to whether they have the credentials or experience to offer sound advice on a variety of serious matters, well, that's your opinion, again. But if you feel HHAD members can offer nothing better than the price of Chang, then I cannot for the life of me see why you are still here. Unless your sole reason for being here is to stir up trouble...?