Chiang Mai’s housing market is booming amid a surge in foreign interest, especially from China.
By Romesh Navaratnarajah
Chiang Mai is considered the hub of Northern Thailand and a centre for business and education, attracting many Thais from across the country to move into the area for work and school.
Made popular as the location for the hit Chinese comedy film Lost in Thailand, Chiang Mai has seen an influx of Chinese tourists flocking to the province in recent years, where their spending power is five times higher than in China, according to property agent Matt Leong of Home Baan Partnership Limited, an accredited Thai real estate brokerage.
At the same time, the promotion of Chiang Mai as an educational and logistics hub is driving the demand for property in the city.
Land aplenty
Given that Thais prefer to live in landed housing developments, condominium projects haven’t been the first choice for buyers since there is still plenty of land available in Chiang Mai, revealed Colliers International in a 2013 research report.
However, the report noted that since the start of 2013, many property developers have launched condos in the area after the government announced plans to develop major infrastructure projects in the province and enhance links to other parts of the country.
These include:
– building a second airport
– developing a high-speed train service from Bangkok to Chiang Mai
– constructing a motorway from Chiang Mai to Chiang Rai to support logistics
– a new industrial area in nearby Chiang Khong
The consultancy stated that the biggest target group for condo units “is students or young adults working there, who prefer to live in a one-bedroom unit of their own rather than leasing a unit”.
As such, one-bedroom units measuring between 24 sqm and 132 sqm account for the majority of condominiums in Chiang Mai, while average land prices in some areas have increased by more than 100 percent over the last few years.
Education does come cheap
While education levels there have improved significantly, tuition fees are still lower compared to those in other Asian countries like Singapore, Korea and Japan, shared Leong.
“The mountainous terrain of Chiang Mai facilitates the medical research done at Chiang Mai University, with data that is centuries old and unavailable in other countries. Their medical facilities, the availability of medicinal herbs, and the recent launch of Bangkok Hospital in the city have contributed to rising demand in the property market,” he noted.
The arrival of the ASEAN Economic Community (AEC), which envisions a single market across Southeast Asia by 2015, is also expected to drive interest for properties in Chiang Mai.
Leong added that residential property in Chiang Mai has been a “silently good investment with stable prices and good prospects for a second holiday home, with all the health services available”.
Image: The Royal Flora Ratchaphruek, a Chiang Mai attraction. (Photo: Nattha W.)
For more information on condominium projects in Chiang Mai, search www.DDproperty.com/en/condo/chiang-mai
How to buy a home in Thailand
Foreigners looking to buy property in Chiang Mai or other parts of Thailand are allowed to purchase only condominium units and apartments. Foreign ownership of condominiums is restricted to ownership of 49 percent of the available sales space.
If the condominium has hit its quota of 49 percent, the foreigner will not be able to purchase a unit under the foreign quota.
Additionally, foreigners are able to buy the entire building except for the land. Land in Thailand cannot be owned by foreigners.
Although foreigners are unable to buy land under their own name, there are a few other ways to “own” property in Thailand:
– Through a Thai Private Limited Company
– With a Native Thai
• Thai Private Limited Company
The company must have mixed Thai and foreign ownership. Foreign ownership of the company must be 49 percent or less.
However, the foreigner can maintain control of the company by handing control to foreign directors, giving foreign partners greater voting rights or through legal power of attorney from the Thai shareholders.
As many foreigners commonly take this route, getting a lawyer to help with all the processes is necessary.
• Native Thai
One of the more common ways to “own” land in Thailand is to marry a Thai citizen and place the deed in his/her name.
This can be dangerous for the foreigner, as the land will be legally owned by the Thai citizen. Should the foreigner be evicted, there are no legal avenues to fight this. However, the terms in the lease can be specified by the foreigner, such as the lease amount or what happens if the foreigner wishes to sell the property.
The foreigner must take steps to protect his investment, because if he is married to a Thai citizen and the marriage ends in divorce, the property will be owned by the Thai citizen.
The foreigner can legally protect himself by leasing the property for 30 years with an option to renew. The foreigner must register, or the lease is good for only three years.
After 30 years, the foreigner can renew further, but the renewed lease will not be registered, which means that should the Thai owner choose to sell the property, the foreigner will not be able to contest the decision.
Acquiring a 30-year renewable lease without a trusted Thai counterpart to hold the deed is dangerous, as there is absolutely no guarantee after the 30 years is up that the land/property will not be sold even if the foreigner has successfully renewed the lease.
Additionally, the costs involved in renewing are usually many times higher than the initial price.
This article was first published on DDproperty.com, Thailand’s leading property site.
INTERNATIONAL HIGHLIGHT
We check out a new residential development in Chiang Mai that’s set to tempt foreign buyers.
Stylish Chiang Mai
Khanklong-Nimmanhemintr Road
Type: Condominium
Developer: Siam Real Estate Solution
Tenure: Freehold
Facilities: Swimming pool, modern-style gymnasium, sky lounge, proximity card and elevator, large parking space.
Nearby Key Amenities: Chiang Mai University, Bangkok Hospital, and several malls, including Star Avenue and Central festival Chiang Mai.
Nearby Transport: Only five minutes from Chiang Mai International Airport.
Starting Price: 3.9 million THB (S$152,529)
A low-rise condominium project of 95 units spread across two residential blocks in the heart of Chiang Mai, offering gorgeous views of the nearby mountains.
Comprising a mix of fully furnished apartments ranging from 592 sq ft one-bedroom units to luxurious three-bedroom penthouses measuring 1,313 sq ft, prices start at an affordable 3.9 million THB (S$152,529).
Residents can choose to relax in the swimming pool set amidst lush greenery or work out in the gym. Other facilities include a sky lounge, proximity card and elevator, and automatic entrance gateway.
The freehold development is within proximity to medical facilities, shopping malls, and an established university, while Chiang Mai International Airport is only minutes away.
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