Senator Somchai Swangkarn Raises Alarms Over Foreign Ownership Increase in Thai Condominiums

A caretaker senator has recently voiced concerns over the government’s controversial plan to increase foreign ownership of condominium units from the current 49% to a whopping 75%. This proposal, according to caretaker senator Somchai Swangkarn, could spell not just economic ramifications but also political turmoil that might threaten the prime minister’s position.

On a Facebook post shared on Tuesday, Somchai Swangkarn emphasized that the policy of extending the foreign leasehold duration from 50 years to an incredible 99 years, alongside the increase in condominium ownership, smacks of a conflict of interest. He implies that these changes might overwhelmingly benefit property businesses with ties to cabinet ministers, including the Prime Minister himself, Srettha Thavisin.

Not sparing any words, Somchai highlighted that the prominent property developer, Sansiri, has ownership links to Prime Minister Srettha’s family. This connection, he argued, could lead to accusations of constitutional violations and contravene the Organic Act on Anti-Corruption if the cabinet pushes these decisions through.

In response to these allegations, Interior Minister Anutin Charnvirakul mentioned that the cabinet has already instructed a comprehensive study on this policy. Interestingly, this issue did not make it onto this week’s cabinet meeting agenda. According to Anutin, the Land Department is currently weighing the pros and cons of this pivotal policy shift.

Interior Minister Anutin defended the government’s stance, stating that the nation’s economy is in dire need of stimulation. He assured that the proposed changes were not crafted to favor capitalists but to kickstart economic growth while safeguarding the rights of Thai citizens.

Adding to the debate, Sopon Pornchokchai, the president of the Agency for Real Estate Affairs, drew attention to regional practices. He noted that property lease periods for foreigners are capped at 50 years in Cambodia, China, Myanmar, and Vietnam, 30 years in Indonesia, and 60 years in Singapore. Similarly, foreign condominium ownership is restricted to 30% in Vietnam, 49% in Indonesia, and 50% in Malaysia.

Sopon voiced his apprehension that the government’s proposed policy might lead to an uptick in transnational crime, money laundering, economic manipulation, and even pose a threat to national security. He suggested that for any policy change to be effective and unbiased, the government should set a minimum condominium purchase price for foreigners at 10 million baht. This would ensure that lower and middle-income Thai citizens can still access affordable housing.

To curb property speculation, Sopon also proposed a three-year restriction on selling purchased condominiums by foreign buyers. By implementing such measures, he believed, the market could maintain its equilibrium and protect domestic buyers.

Meanwhile, local property industry executives are enthusiastic about the potential policy modification, as there’s a growing demand from foreign buyers. However, the sector is wary due to high levels of household debt and stricter lending conditions affecting the purchasing power of local buyers. Consequently, developers are proceeding with caution, balancing the interests of both local and foreign markets.