“The idea is to help the real estate sector clear unsold stock, bring in new investment and value-added to the economy and improve the cash flow for the developers,” company president Somchai Soongswang said in a phone interview.

“Based on our statistics and observations, there is no problem in the housing sector per se, the issue is only in the condominium segment.”

Like most Asian economies ravaged by the Covid-19 pandemic, Thailand’s gross domestic product shrank every quarter this year in its worst recession, according to government statistics. That included a 12.1 per cent contraction in the second quarter, surpassing the slump during the Asian financial crisis in 1997. The government has forecast the economy to grow by 3.5 to 4.5 per cent in 2021.

The current crisis, however, has forced developers to slow down housing construction and raise an alarm bell, seeking state support to pull through the crisis.

Thailand had 384,565 units of unsold homes worth around US$45 billion at the end of June, according to researcher Agency for Real Estate Affairs in Bangkok. They would likely require about two years to clear out. Of these, unsold condominiums nationwide stood at about 100,000 units, Soongswang estimated. Foreigners are not allowed to buy landed properties in the country.

02:15

Private pools and villas at Thailand’s luxury quarantine

Private pools and villas at Thailand’s luxury quarantine

Thailand Privilege Card, wholly-owned by Tourism Authority of Thailand, will start accepting applications for the new visa package called Elite Flexible One from January 1. It will keep the offer open for two years, by which time it hopes the Covid-19 pandemic will end as more vaccines are made available.

Soongswang said about 20 developers attended a December 3 briefing on the new visa plan. The 500,000 baht visa fee may be waived or discounted in a property purchase package to be decided or promoted by the developers. Other usual perks include express immigration clearance and airport limousine service.

Chinese citizens have taken up long-term residency, accounting for 31 per cent of all holders of existing Thai Elite visa packages, according to property portal Juwai IQI. They outranked the Japanese, the next biggest investors, by four times. The new visa offer from January 1 has its advantages, the firm said.

06:15

Thai citizen living in Hong Kong supports pro-democracy demonstrations from afar

Thai citizen living in Hong Kong supports pro-democracy demonstrations from afar

“For the applicant, it’s appealing because your money is going into an asset that can earn returns and you can sell again later,” executive chairman Georg Chmiel said. “You can also live in the property. The other Thai Elite visas all require payments to the government that you never get back.”

While the effort will throw a lifeline to home developers, Thailand’s visa-for-cash scheme will compete against more attractive citizenship plans based on property purchases offered by European countries such as Greece, Portugal and Spain, he added.

Until normal travel is restored, it is unlikely the latest offer from Thailand Privilege Card will attain much success, except with foreigners already living in Thailand who wish to extend their stay and see an opportunity to obtain a bargain on real estate investment, Chmiel said.

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The plan would also not be popular especially with foreigners who are looking for permanent residency rather than just long-term stay, said Terence Law, a senior principal project director at Centaline.

Some Thai developers of high-end projects have been offering similar visas as an incentive or option to overseas clients well before the latest announcement, he added, but usually clients would prefer other incentives, such as a direct price discount.

Local Thai property agents, however, welcome the idea to help ease the backlog of unsold properties.

Some 70 per cent of them believe giving foreigners a long-term visa or work permit in exchange for buying property worth at least 5 million baht is the best way to stimulate foreign demand, according to an online survey of 154 agents in October and November by Juwai IQI.

“Foreign investment is an important driver of the property market in Thailand and helps support jobs, government revenue and new development,” said Somsak Chutisilp, managing director of IQI Thailand.

“But travel right now is very difficult, so some property transfers are not taking place.”