Prime Minister Srettha Thavisin's plan to revise the law to entice more foreigners to buy condominiums seems to be backfiring already.
Mr Srettha, the former CEO of leading real estate developer Sansiri Pcl, now has to defend himself after he ordered the Ministry of the Interior to study proposals submitted by the real estate sector to raise the quota for foreign ownership of condos from 49% to 75%.
Another plan they were asked to scrutinise was extending the residential land lease terms from 30-50 years to 99 years.
The order came after seven associations of real estate businesses lobbied the Department of Lands and various state agencies to promote such a policy.
Mr Srettha has defended the policy by arguing it only relates to leasing land, rather than selling it, so the government is not putting the country up for sale as critics contend. He is adamant this would boost the economy and foreign investment would flow in if more foreigners were able to buy condos or enjoy long-term property leases.
But the premier is toying with a policy that grants foreigners access to rent and buy property in the country. Previous governments that tried his were lambasted for "selling the country off" and forced to backpedal.
The latest example occurred in November 2022 when the former government led by Gen Prayut Chan-o-cha tried to revise the law in a way that would permit certain qualified foreigners to buy one rai land as their residence -- part of a policy to invite foreign talent and people in select professions to settle and work in Thailand.
The scheme drew heavy flak and and had to be scrapped immediately. Interestingly, Mr Srettha also criticised the policy. On Nov 25 of that year used his Twitter (X) account to advocate for an extended land lease of 99 years "as this would give tenants equal rights to develop land, as if they were the owners".
The question the PM needs to answer now is how this policy will benefit the Thai people. Instead of just painting a rosy picture, his government needs to come up with convincing data about the benefits and impact. While the idea may sound good in principle, there are also challenges.
For example, Praphinleeya Phuengkhuankhan -- head of residential sales and a property constant at CBRE Thailand -- has warned that such a policy would be unlikely to boost the economy or the Thai property market as very few condo projects have filled the current quota.
Mr Srettha must also address the valid concern that this could pave the way for "foreign enclaves" to be established. He should take a look at Singapore's successful model that imposes a strict property quota to prevent race-related conflicts from erupting.
Another issue he needs to address is the impact this would have on house prices. In countries like the United Kingdom, Spain, and Portugal, local people complain they have been priced out of the market because of similar laws that grant foreigners equal or preferential rights when it comes to buying property.
Mr Srettha should prioritise helping Thais purchase property and helping rural people acquire land where they can live and work instead of assisting companies in selling condos.
On the one hand, the current policy needs a rational update so foreign talent is attracted to work and settle in Thailand. But any changes must be made prudently with the benefits to the Thai public put first.