Foriegners not being able to buy land.........

[chuckwoww]

I don't know for sure but I suspect most of the best land in Thailand is owned by Thai/Chinese. They probably don't want the laws changed.

[Guest]

is very foolish policy. And there is a clear trend toward market liberalization around the world. Why? Because it works and we know from our experience over the last century that the alternative does not.

 

Opening up the market is better for Thais. Shouldn't a Thai property owner have the freedom to sell his property to whomever he likes. If he will make more profit selling it to a Farang, shouldn't he have the freedom to do that?

 

If these sorts of restrictions keep prices artificially low - which, oddly enough, seems to the main argument here in favor of such restrictions - the restrictions are clearly bad policy. If prices are artifically low, the ability of Thai property owners to obtain market value for their property is underminded - that is certainly not good news for property owners. Moreover, if the policy actually keeps prices artificially low, it leads to a misallocation of resources. Land is not used effeciently, and the economy as a whole and everyone in it - property and non-property owners alike - suffer. That is a fundamental when prices don't reflect market value.

 

On the other hand, if the restrictions don't keep prices down, what's the point? If you believe that artificially low property prices are a good thing for some reason (hint: there isn't a good reason), and restrictions on foreign ownership don?t artificially lower prices, this restriction doesn?t achieve its supposed objective. It doesn't make sense.

 

But that is only the beginning of the problem. If you believe in freedom and that people should be free to do as they see fit unless there is a good reason for restrcting their freedom, than the policy is bad since restrictions on foreign ownership - under this scenario - are restricting freedom (a bad thing) while not acheiving their desired objectives that supposedly justifies this restriction on freedom.

 

Moreover, they tremendously complicate the cost of doing business in Thailand. This is certinaly not a good thing - unless you think Thailand should be some form of impoverished cultural museum stuck in time for the benefit of visitors. Maybe that is desirable for visitors, but it is not very good for the people who actually live here.

 

In other words, either way, it is a really stupid policy. That is why we have seen a marked move toward market liberalization generally around the world.

 

Now in practice, even though foreign ownership is generally prohibited (I know there are exceptions, such as factories on industrial estates, etc.), foreignors can use various structures to obtain control over, and many of the economic characteristics of, property ownership. In other words, the market ultimately triumphs. Surprise!

 

But it does so at a cost. The structures are cumbersome and can be risky. To employ them properly, you need competent and honest professional advisors. Because the structures are cumbersome and expensive, they encourage short-cuts, which, in turn, fuels fraud and corruption. There are outfits in Koh Samui and Phuket that are notorious for rip-offs. And at the lower end of the market, most of the outfits that are not fraudsters are incompetent. This is not good for Thais or Farangs.

 

In brief, Thai policy on property ownership is a mess. It fuels fraud and corruption. It is a classic example of what happens in a less developed country with weak legal institutions when you have policies that are contrary to market forces.

[gummigut]

josh_ingu said:

Why would the be "forced out" of the market? If they are *in* the market (i.e. property owning), then indeed their assets would *increase* in value rather than decrease.

 

Yes, but the % of land held by poor and middle class would decline.

 

Yes the assets for those owning already would increase, but the earning opportunity of local folk cannot compete with the earning opportunities in other countries, so in time, net holdings of poor/middle class would decrease.

 

If it was a perfect world, then yes, opening up the rights would be the best thing for Thailand. Capital would flow into Thailand and the land would be put to its most efficient use possible, like the US. Bush has done a great job weakening environmental rights. I'd hate to see what those same corporations would do to Thailand with very little enforcement. The rich Thais are doing a damn good job at pillaging the environment themselves.

 

<<burp>>

[Lusty]

shygye said:

[color:"green"] Same here in San Francisco. We have all these forigners, cooming here, buying land/apartments Houses etc, and leaving...absentee ownership. [/color]

 

That is BS. Do you have ANY statistics of how much housing is owned by foreigners in SF? The reason home prices are continuing to rise you can blame on the banks and other mortgage companies. They introduced 0 down payment and interest only loans. This has fueled speculation by AMERICANS buying and flipping houses. People expecting home prices to increase 20% per year.

 

So is a foreign absentee owner any worst than an American absentee owner? Each has to pay property taxes and meet health and safety regulations.

I can remember the property price boom here in the 80s.You could make 5k in a month without ever having to make the first payment!

Lots of people got kicked up the arse sometime later when it all went shit shaped.

[Old Hippie]

Lusty,

 

Yeah, many had to walk away from houses they couldn't afford. In some parts of the city, it was 12+ years before people broke even...everyone here forgets this happened...that was when the valley collapsed the first time...many experts are saying when these creative mortgagues start comming due this year, many will get screwed again...hopefully will bring prices down...but really, theyed have to drop 50% before I could buy on my salary...

 

Gadfly,

 

"...Shouldn't a Thai property owner have the freedom to sell his property to whomever he likes. If he will make more profit selling it to a Farang, shouldn't he have the freedom to do that?..."

 

In Theory yeah sure, but consider the consequences. So a farmer sells his land, makes a ton...where does he go, what does he do? The cost of replacing the land will be high, inflation would soar, and he'd be screwed fast, as will the next generations...

 

You have many elderly people in the USA, who bought houses cheap, 30+ years ago. They could sell them for a huge profit, and walk away...but go where? a replacement house might be more! or maybe they get a cheaper place, then what they sold the home for, but because of tax laws would have to pay higher taxes on the new place, which they couldn't afford. The same thing could easily happen in Thailand. Higher values=higher taxes=people losing their homes...it's happening here...many seniors have a property tax bill higher than their mortgage ever was, and they can't keep up and are losing their homes...

 

Gummi,

 

"...Yes, but the % of land held by poor and middle class would decline.

 

Yes the assets for those owning already would increase, but the earning opportunity of local folk cannot compete with the earning opportunities in other countries, so in time, net holdings of poor/middle class would decrease..."

 

Not to forget, higher values mean higher taxes, which many couldn't pay perhapes being forced to sell cheaper, just to pay the taxes, thus losing everything. The alternative it that prices for all goods go up (Inflation) which means Thailand loses the cheap labor, which means manufacturing industries pull out and go to cheaper markets...So over all, letting forigners buy land with little or no control is just a bad thing...

[Guest]

In Theory yeah sure, but consider the consequences. So a farmer sells his land, makes a ton...where does he go, what does he do?

It is not a theory, it is a matter of principle, and the principle is this: shouldn't the farmer have the freedom to make this decision rather than some paternalistic government?

 

I have faith in ordinairy people to decide what is best for them. I have less faith in governments, particulary governments in places such as Thailand, to make these sorts of decisions. And history and the vast - virtually all - weight of economic evidence is on my side. This is not theory.

 

Believing that these sorts of restrictions actually make people's lives better is theory. It is a theory that has been proven to be wrong time after time.

[JJsushi]

Old Hippie said:

Sorry dude, but the silicon valley boom in the 80's, and again in the 90's did help drive up the cost of real estate in this area. Shygye is right about the "creative financing" and people looking to get rich quick flipping properties also being part of the problem. However I will stand by the rest of my statement .

 

"...So tell me, how come hosing demand/price continued to rise until very recently???.."

 

Actually, housing prices continue to be high in this area (nation wide really) the rapid appreciation here is starting to slow. Simply put, real estate is a great investment, maybe the best investment for long term gain. There are tax benifits , and you can recoup your living expenses etc when you sell.

 

Better yet is if you rent the property. Put a little down, let the renters pay your mortguage, an then the rest is pure profit...Additionally, there is only so much land available, so all of these make it a good investment. Additionally, Land never disappears, it stays where it is...not like stock prices etc...companies fold, investors lose etc...but no matter what, the land stays put...

 

And yes, my opinion, or part of it is driven by emotion. My Condo is for sale, the whole damned apartment complex is now for sale. Yesterday was open house. 240 units for sale. There was a Taiwanese firm in here looking to buy up 10 units, they are bidding 20% over market value, they want to lease the units to the Taiwanese owned fiber optics company across the street, as corporate housing. Not to mention what other investment firms might be buying here...foreigin or otherwise.

 

240 units-10=230, less supply, and that drives up the cost of my unit proportionately. The price is almost $400K USD for a 1 bedroom condo, about 500 sq. feet. Basically, I can't afford the place on my current salary (cut 35% in airline backruptcy, and a 5 year wage freeze). Now, If I wasn't compeating with these investment firms, including the foreign ones, the cost would be less, and I might be able to afford it...

 

The fact that a Taiwan firm is buying 10 units, in theory (maybe reality) means 10 less locales can buy them... the fact that the Taiwanses bid the cost up means the value of the remaining units is that much higher, pricing more people outof the market.

 

O.k. 10/240 is about 4%, so if this panned out across the country, that would mean IN THEORY that 4/100 Native born Americans would POTENTIALLY be pushed out of the market... So, clearly people from outside the country buying real estate in the USA does have some impact on the market. maybe not 4% nation wide but it does have an impact.

 

Now, go to Thailand, And let farangs go over there, and start buying land, and what do you think will happen? WHat would happen if the Chinese, Japanese, Koreans whoever went there and started buying up all the premium rice farm land? What if the start exporting all the rice? What does that do to the cost of Land? and Rice? for the Thais...?

 

Sorry But I fail to see how you guys can say foreign investment has no impact on real estate prices... Very clearly, it does, and that is with all emotion aside.

 

 

 

 

 

Seems as if someone has been reading "The Wealth of Nations" by Adam Smith!

 

 

LOL!! Who would have thought that OH would be a cheerleader of Social Economics! Karl Marx would be proud of you! Be careful OH the supporters of the pure capitalism is the best system mantra, will try to make u dissapear.

[JJsushi]

Gadfly1 said:

In Theory yeah sure, but consider the consequences. So a farmer sells his land, makes a ton...where does he go, what does he do?

It is not a theory, it is a matter of principle, and the principle is this: shouldn't the farmer have the freedom to make this decision rather than some paternalistic government?

 

I have faith in ordinairy decision to decide what is best for them. I have less faith in governments, particulary governments in places such as Thailand, making these decision. And history and the vast - virtually all - weight of economic evidence is on my side. This is not theory.

 

You have a neat argument of the individual vs. the government as the best decision maker for economic efficiencies yet u somehow seem to conveniently leave out the business community in the process. Don't you think that historically the business community has the greatest influence on economic policies set forth by government?

Politicians do not operate in a vacuum. I would say that business and government go hand in hand. Yet you seem to think that the business community is under some unbearable yoke created by government. From my understanding it is business that uses the government to protect them from competition(ie foreign businesses) and the rights of individual citizens(ie limiting damage awards for acts of negligence).

Lest we forget it is the individual guided by self interest to protect what he has that will eventually allow him to grow into business that influences politics. What I am basically saying is that at some point self interest becomes detrimental to society as a whole. People select their government to protect the society, so in essence the government is empowered to makes the "best" decisions for a society of individuals. Yet somehow power corrupts and when you align self interested businesses with empowered politicians, the popoulace will get screwed.

 

Actually putting what I have written above aside, I think you place too much emphasis on the individualistic or "self-interest" view of economics and less on the social view. Capitalism which is a "self interest" model is not the best nor the most efficient method of allocating and distributing resources, especially if it is unregulated.

 

I find your views to be way too textbook as if I was taking ECON 101 in uni all over again. I have yet to ascertain as to whether your a corporate libertarian or a neoliberal in your economic views.

[Old Hippie]

JJ,

 

I believe they already sent their evil agent in the form of a girl from Si Saket, and a back up team from Buri Ram...

 

"...pure capitalism is the best system..."

 

I don't think it is in the long run (don't think socialism is, and communism is just a joke...no idea what is the best system really). Sure, the guy selling his land for a killing today MIGHT make out on the deal, if he reinvests, and/or dies before he spends all his money. Trouble comes down the line, the future, subsequent generations will have to deal with the economic irresponsibility of the present generation.

 

Using Hawaii again as the model of my example, yes, the first guys who sold land to the Japanese Hotel chains, developers, investment groups made out for the time...but what about now? 2,3,4 generations later, people can't afford to buy property there. Sure, maybe the grand parents set them up, invested well etc, but otherwise, the next generations are screwed, not mention the families that never had any money to start...

 

I don't have the stats on what % of the "Available" land (as in land that can be sold) in this country is in the hands of foreign interests, perhapes the impact is far less on the whole, than I perceive it to be. None the less, I do feel it takesit's toll, at least in certain markets. To me, anything that makes or adds to the difficulty of owning a home for middle class americans, is a bad thing.

 

I am not sure when the laws changed, but the USA did have laws against forign born/non citezens owning land at one point. I believe the policy was aimed largely at Chinese and Japanese, but I believe it pertained to other groups as well. While it could be argued the laws were founded in racst policy, others could argue the policies were there to protect the citezens born here.

I view the current Thai foreign land ownership laws as trying to protect the Thai people, more than I see them as Zenophoboc/racist. There are plenty of foreigners who want to buy land in Thailand, they would pay a primium price for it. Allowing them/us to do so will hurt poor and middle class Thais in the long run.

[Hidy Ho]

I'm getting off topic by commenting on your continuing criticism/whining about Bay Area real estate ..

 

1) You can always move to Kansas.

 

2) Real Estate purchase is a privilege for those that takes the risk and can get financing ... it's not a right for "citizens born here." It's often lifestyle priority/choice, even in Bay Area. My parents came to the Bay Area with practically nothing in 1976 and were able to buy after many years to saving. Believe me, they weren't making much ... they worked for US Government.

 

3) As a natualized US citizen, I'm offended by "citizens born here" type of comments/logic. I have high opinion of myself and consider myself to be an asset to USA despite the fact that I wasn't "Born in the USA" ... I vote, serve in the jury, pay my taxes without too much cheating and I fucking care about the country ... Hell, I think that makes me more "American" than 90% of "citizens born here" ... I sure pay taxes more than 90% of 'em