As a long time consultant in the Thai property sector it has become an ignominious recurring theme to hear brokers tell clients that there are no institutional options for transactions. Certainly in the resort areas, cash has remained king for nearly two decades, but the reality is things are indeed changing.
Leading the way for financing has been Thai-listed group MBK Guarantee Co. Ltd. (MBK G). Their focus is on the condominium market and foreigners are eligible for loans. Areas that are covered are Bangkok, key resorts areas such as Phuket, Pattaya, Hua Hin and other major provincial locations such as Chiang Mai.
Unlike other countries, work permits and residence visas are not required, nor is a Thai spouse. Age coverage is up to 70 and financing can be used for off-plan or completed units. Loan to value ratio is up to 50% with terms from one to ten years. There are either higher monthly payments or an option for a balloon at end of the term. The current interest rate is MLR plus 2.375% per annum.
Another emerging option is in Singapore with the bank ICBC. Loans are in Singapore currency and the portfolio is focused on similar areas to MBK including cities and resort areas. Interest starts are 5.25% and escalates over the term, which is three to ten years.
In certain markets another Singapore bank UOB has also been providing financing for Thai property through an international mortgage facility. There overseas focus is the UK, Australia, Japan, Thailand and Malaysia.
The Kingdom’s real estate sector is continuing to see high levels of interest from overseas buyers be it regionally from Asia or further afield. As the market matures and there has been a long term record of stability and demonstrated levels of capital appreciation both the end user an investor segments are now able to benefit from a broader more developed infrastructure than ever before.