The property market in Phuket is unique, rare and endangered. For the duration of the real estate boom of the past six years, its growth has been driven almost entirely by cash. Finding similar models, though they do exist, is hard. It's a true idiosyncrasy, even within other markets in Thailand.
While Bangkok, Hua Hin or Pattaya, for example, are driven more from the domestic market along with some foreign investment, our island is a virtual cash cow when it comes buying villas, condos and lifestyle investments.
With the market softening over the past 12 months, together with a spate of new projects entering the arena, new options are emerging for buyers.
Banks in Thailand are not allowed to loan money to foreigners. Over the years, this regulation has plagued the market, especially for buyers looking for investment-grade properties.
Overseas hot spots, such as London, Australia and even Hong Kong and Singapore, allow the leveraging of units with the ability to obtain financing.
For resort properties in Spain in areas such as the Costa Del Sol, buyers can secure financing over a long term with a small down payment.
The winds of change have arrived with the Bangkok Bank out of Singapore offering foreigners the option to finance freehold condominium units. There are some restrictions, including an age limit of 65 years and that terms not exceed 20 years.
Loans may be secured in three currencies: Euros, US dollars and Singapore dollars. Applicable interest rates depend on the relevant currency. Security for the loan will be on the condominium title.
Since loans for condominium units will be secured on titles, only 49% of the freehold units in a development will be open to this type of loan. Leasehold condominiums are not eligible as they lack the title