Could Chiang Mai be top Asian city for investors?
When it comes to Thai property investment, it is the instinct of most to head to Bangkok, but savvy buyers may instead choose to put their money in Chiang Mai real estate. Tourism numbers are increasing and the city remains a business and academic hub. This is a departure from previous years and Chiang Mai has historically been looked down on as Bangkok's rural cousin. It's decline began before the economic crisis hit, but things seem to be changing for the city.
Tourism numbers hit five million annually, the Financial Times reported, and activity is increasing elsewhere. Ed Schroeder, of property agents Century21 Lanna, told the newspaper: "Go anywhere in the city and there’s new construction but the main interest in the market is Thai, particularly in condominiums, over the past year." However, foreign investors are also drawn to Chiang Mai, thanks to its business reputation, milder climate and low cost of living.
Keith Humphreys, executive director of Chiang Mai-based property consultancy Prestige Property Services-Asia, agrees, telling the newspaper: "By a process of elimination Chiang Mai comes out on top when you look around at other cities in Asia. Many expats have lived and worked in Asia and cast around for a good city to retire to. Chiang Mai has all the amenities of Bangkok with few of the drawbacks."
However, those considering Thai real estate investment need to be aware that lending criteria is tightening. In a bid to reduce debt levels in the country, several banks have made the move to cut loan-to-value ratios, the Bangkok Post reported. The United Overseas Bank (Thai) is among those tightening criteria, lowering loan-to-value ratios to 80 per cent from 90 per cent for residential real estate priced at ten million baht (£212,520) or more. Kasikornbank has also tightened rates to between 75 per cent and 80 per cent from 90 per cent to 95 per cent for third-home borrowing. For buyers, this means it is more important than ever to have finances in place before purchasing property.
Tourism numbers hit five million annually, the Financial Times reported, and activity is increasing elsewhere. Ed Schroeder, of property agents Century21 Lanna, told the newspaper: "Go anywhere in the city and there’s new construction but the main interest in the market is Thai, particularly in condominiums, over the past year." However, foreign investors are also drawn to Chiang Mai, thanks to its business reputation, milder climate and low cost of living.
Keith Humphreys, executive director of Chiang Mai-based property consultancy Prestige Property Services-Asia, agrees, telling the newspaper: "By a process of elimination Chiang Mai comes out on top when you look around at other cities in Asia. Many expats have lived and worked in Asia and cast around for a good city to retire to. Chiang Mai has all the amenities of Bangkok with few of the drawbacks."
However, those considering Thai real estate investment need to be aware that lending criteria is tightening. In a bid to reduce debt levels in the country, several banks have made the move to cut loan-to-value ratios, the Bangkok Post reported. The United Overseas Bank (Thai) is among those tightening criteria, lowering loan-to-value ratios to 80 per cent from 90 per cent for residential real estate priced at ten million baht (£212,520) or more. Kasikornbank has also tightened rates to between 75 per cent and 80 per cent from 90 per cent to 95 per cent for third-home borrowing. For buyers, this means it is more important than ever to have finances in place before purchasing property.
PUBLISHED : 25TH JULY 2013
