Wooing the ’grey’ segment

Retirees contemplating a move to Thailand might well feel nervous about purchasing property in the Kingdom. The current political situation is somewhat volatile, and proposed changes to the Foreign Business Act have raised questions throughout the industry. But there´s more to the story than that - and the resort home market still boasts a significant upside for both buyers and developers alike.

Now more than ever, Thailand is wooing foreign retirees, and their continued investments in Thailand reflect a global second-homes trend. The news service DPA recently observed that Pattaya alone reported sales of more than US230 million (Bt7.95 billion) in beachside condominiums last year, many of them snapped up by foreigners. And properties are also selling briskly in many of the Kingdom´s other beach resorts, such as Phuket, Samui and Hua Hin.

More developers, as it happens, are targeting retirees who are considering staying in Thailand permanently or seasonally, rather than those who want to use their investments as vacation properties to be occupied only a few weeks at a time.

It´s plain to see that the Kingdom´s positive attributes remain as attractive as ever. First, and quite obviously, no amount of governmental turmoil will change the fact that Thailand enjoys year-round warm temperatures by virtue of its tropical climate. While their counterparts in Europe, North America, and Eastern Asia shiver through the winter, retirees in Thailand can relax at the beach and bask in the sun.

"Our season is opposite Europe´s, so it´s a great place for European retirees," says Charlotte Filleul, Phuket Sales Manager for CB Richard Ellis. "When it´s winter in Europe, they can come here. When it´s rainy season here, they can go back to Europe."

But perhaps most important, the cost of property in Thailand - as well as the overall cost of living here - remains much lower than in European and Caribbean hotspots. Norbert Witthinrich, managing director of Phuket-based real estate agency and development company SEA Property International, says that Thailand is "one-third of the cost of most other international holiday destinations.

" He also notes that the Kingdom´s hospitable people are another selling point. "Thailand provides very friendly and service-minded people," he says, pointing to his home turf of Phuket, specifically, as an advantageous location. "Phuket is a very safe place and Thailand is a democracy," he says. "Phuket offers also a lot of activities, like sailing, golfing, etc. - and all for an attractive price."

In addition to the warm weather and overall affordability, Thailand has the benefit of offering top-notch medical care, a notable factor for aging populations who choose to spend a significant amount of time in the Kingdom. Thailand is an international leader in the medical tourism world; the country´s most renowned facility is the private Bumrungrad International Hospital, located in central Bangkok. It´s Asia´s first internationally accredited hospital, a sprawling, world-class operation that last year treated 400,000 foreign patients from over 150 countries. In a recent article called "Medical Meccas," Newsweek magazine said Bumrungrad provides "world-class medicine at developing-world prices."

Another characteristic working in Thailand´s favour centres on transportation. For foreign retirees, getting to the Kingdom from abroad has never been easier. In addition to top-tier service from Thai Airways, Bangkok is a regional aviation hub, and visitors who touch down at Bangkok´s new Suvarnabhumi airport can easily connect via domestic service to their destinations within the Kingdom. (Suvarnabhumi, which opened in September, has faced its fair share of unexpected hiccups; the old airport, Don Muang, is scheduled to re-open soon, and it´s hoped that this will ease congestion at Suvarnabhumi. Officials say this will be a temporary arrangement while problems at the new airport are fixed.)

A significant player in the bid to attract retirees is the Bangkok-based Thai Longstay Management (TLM), a company that is 30 owned by the Tourism Authority of Thailand.

The group offers qualified tourists the TLM Privilege Card, which provides for priority service in airport immigration lines as well as airport transfers. And perhaps most significantly - depending on the level of paid membership - foreigners can receive one-year multiple-entry visas. Packages cost between Bt6,000 and Bt72,000.

So how might the potential changes to the Foreign Business Act - which would restrict provisions that allow foreigners to own freehold property - figure into retirees´ plans to settle in Thailand? Some analysts project that the market for condos - which would be unaffected by tightened laws - might become more attractive. There are also concerns that Thailand might lose out to nearby Malaysia and the Philippines, two nations that are also keen to attract foreign retirees. Last December, in an attempt to boost economic development, Malaysia relaxed its laws that govern foreign ownership of residential property. And in the Philippines, the government has expressed its desire to attract one million foreign retirees by 2015.

Witthinrich, however, says that economics, plain and simple, will continue to make Thailand as attractive as ever. "I see a very strong group from Europe over 50 years old," he says. "They are selling their homes in Europe…and buying a villa or condo here that´s double the size for half of the price, and they use the profits to retire earlier. This group is growing…and of course all developers see this. I believe that a villa or condo project that brings all the facilities together that people this age need will be very successful."

Indeed the statistics are on Thailand’s side. Retirement overseas in warmer climates is increasing. For example, the UK department of Works and Pensions reported that 660,000 UK born people received a pension overseas in 2005.

CB Richard Ellis believes that the trend of owning property and retiring overseas is going to grow, and Thailand is still in a strong position to benefit from this trend as it is already well-recognized as a tourist brand and is therefore well-positioned as the preferred location in Asia to own a second home.