Foreigners will find it easier to buy condominiums in Thailand under a new service offered by Bangkok Bank.
The bank's Singapore branch has begun offering offshore financing for foreigners seeking to purchase condominiums in Thailand.
Torphong Charungcharoenvijj, general manager for the Singapore branch, said loans of up to 70% of a condominium's value were available to foreigners both in Thailand and other countries who want to buy this type of property.
Applicants can e-mail their details or send them by DHL to the bank's Singapore branch, he said. The applicant's earning ability determines how much he or she can borrow. For example a person seeking a loan to buy a condominium worth 20 million baht should be earning around 300,000 baht a month, Mr Torphong said.
While foreign nationals are allowed to purchase condominiums in Thailand, financing has often been problematic, with local financial institutions reluctant to offer loans due to uncertainties regarding credit risk. The Bangkok Bank service is just what Phuket needs, according to Stephen O'Brien, managing director of the real estate agency Knight Frank Phuket
``Well over half of the inquiries we receive ask for lending or mortgagee finance and up until now there wasn't anything available, except a number of private firms offshore offering lines of credit or personal loan financing,'' he said.
``I am sure buyers will feel much more relaxed dealing with such a credible name as the Bangkok Bank, than an Isle of Man-registered company offering unattractive financing terms.''
Bearing in mind that the bank's terms apply to freehold condominium title, Mr O'Brien said he expected the takeup rate would be significant.
Under Thai Law, foreigners can own freehold title up to 49% of a condominium project. Generally speaking, when a condo project is launched, sales are always brisk, because foreigners want to hold their units as freehold. If the unit is in the remaining 51% allocation, foreign buyers can either lease or set up a Thai firm and hold freehold through that company, a rather cumbersome structure.
Mr O'Brien is confident that this is the start of more widely available mortgage financing for foreigners in Thailand.
``I suspect that other Thai banks will shortly start offering similar terms and conditions. All of this of course will result in a competitive environment bettering the consumer, whereby the banks will try to outdo one another with more favourable terms, similar to Australia and the UK.''
He said Thai property market had a good future because investors viewed the rental yields of 5-6% as attractive.
``Singaporeans are interested in Thai property because it is three times cheaper than what is available in their own country,'' he said.
Source - Bangkok Post 2005-06-22
