Thailand’s largest condominium developer LPN Development believes the revision of condo laws will negatively affect most developers due to an increase in costs to build larger units. Last week the Lands Department said it planned to amend the current condominium law to change the definition of a condo, including a requirement that a condominium complex should have at least three storeys and each unit should be no smaller than 30sqm
Thailand’s largest condominium developer LPN Development believes the revision of condo laws will negatively affect most developers due to an increase in costs to build larger units.
Last week the Lands Department said it planned to amend the current condominium law to change the definition of a condo, including a requirement that a condominium complex should have at least three storeys and each unit should be no smaller than 30sqm.
According to Lands Department director-general Anuwat Maytheewibulwut, some developers have converted low-rise buildings such as townhouses or detached houses into condominiums, which can be sold to foreigners. Several developers made very small rooms of 10-20sqm, lowering the living standard of the residents.
LPN Development managing director Opas Sripayak disagreed with the Lands Department as he believed that city condo buyers are concerned more with price than size.
“The best way to improve people’s living standard, for us, is to make affordable options for them,” said Opas. “We don’t think larger units are necessarily better than small ones, if we can develop smaller rooms to be more functional to support people’s lifestyles.”
He also added that if developers have to build a room of 30sqm instead of current sizes of between 22-25sqm, the prices would have to be inevitably increased, or else, the projects would have to be located out of town.
“The real demands of Bangkok condos are buyers who can afford a condo priced between THB600,000-900,000 (US$19,500-29,250) per unit. The increase in prices will drive them away from the city. And I don’t think this would be the government’s intention.”
If the law remains uncurbed, Opas still believed that property developers would build condominiums with per-unit utilisation space lower than 22.5sqm.
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It is clearly not in our interest to keep guests at our hotels when it is not safe to do so and we are the first to respond to any threats to safety. I urge the foreign embassies and media to give the private sector more credit and to share responsibility with the private sector in minimising the extensive damage that comes from overplaying the danger to tourists.
Although the Thai real estate industry has continued growing significantly since 2008, we have not seen a real estate bubble environment manifesting. The industry seems to have learned its lessons during the 1997 financial crisis and has successfully implemented the following safeguards: The banking industry has become much more cautious providing project financing and mortgage loans.d
Being a developing country, the cost of property in Thailand is much lower than in the more developed European markets. But, on the other hand, prices for Thai property, in general, are rising at a much faster rate.
Real estate developers in 2010 are more cautious and many have professionalized their operations
Thailand’s property market was able to rebound from past crises and there is every reason to believe it will be able to absorb the blow of recent political tensions. The taxation situation has actually improved the conditions for purchasing property in Thailand, and if property prices do dip slightly as a result of the current situation it may actually be a good time to buy as there is a very real possibility Thailand property will regain its golden outlook soon. As a result, the financial condition of most major housing developers in Thailand is much more robust than in the past. The development of the local bond markets and increasing domestic savings has the made the industry much less dependent on foreign funds, a significant difference from 1997.
Land Ownership: In general, non-Thai businesses and citizens are not permitted to own land in Thailand unless the land is on government-approved industrial estates. Under the 1999 amendment to the Land Code Act, foreigners who invest a minimum of 40 million Baht (approximately US$1.2 million) are permitted to buy up to 1,600 square meters of land for residential use with the permission of the Ministry of Interior. If the required land is not used as a residence within two years from the date of acquisition and registration, the Ministry has the power to dispose of the land.
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