The sun sets over the Andaman Sea. Now holiday home buyers can have confidence that the real estate view is rather more attractive, too, according to Jones Lang LaSalle's transparency survey. - Photo by Rene Erhardt

After tourism and rubber, property is the third-biggest industry in Phuket, so sellers of homes on the island – who have been looking at blank order books thanks to the global financial crisis and the Red Shirt violence in Bangkok – will be happy to know that Thailand’s ranking for the transparency of its real estate market has improved, giving buyers increased confidence.

The country still ranks 39th out of 81 property markets surveyed by real estate services giant Jones Lang LaSalle (JLL) and its investment management business, LaSalle Investment Management, which compile the biennial rankings.

In the last survey, in 2008, Thailand came 45th. Its score has improved steadily, from 3.40 in 2006, to 3.16 in 2008 and 3.02 this year. (Scores range from 1 for total transparency to 5 for “opaque”.)

“The improved score is primarily a reflection of more transparency in the capital markets, specifically as they relate to real estate,” a release from JLL explained. “Currently there are 60 firms listed under the Property Development sector on the Stock Exchange of Thailand (SET). There are also 26 property funds that trade on the SET, holding assets of various real estate types. These listed vehicles are subject to higher governance and regulation, as well as regular and standardized reporting, thus providing more transparency to Thailand’s real estate markets.

“This is in contrast with the past when Thailand suffered badly from a lack of information about real estate transactions in the market. Major sale transactions in particular tended to be kept confidential by the sellers and/or the purchasers. As a result, actual transacted values against which to benchmark were scarce.”

'Generally, rising levels of transparency help reduce investment risks." - Longlom Bunnag, Chairman of Jones Lang LaSalle in Thailand

However, Longlom Bunnag, Chairman of JLL in Thailand, warned, “Generally, rising levels of transparency help reduce investment risks, particularly for foreign investors. However, the improved level of transparency in Thailand’s real estate market does not necessarily attract more investment.

“Certain investment decisions in some semi-transparent and opaque markets are opportunistic and in some cases exploit the lack of transparency, thus capturing higher returns.”

“That said, higher levels of market transparency and an increased availability of reliable market information do even the playing field overall, helping investors as well as owners and occupiers make more informed real estate decisions,” he said.

Australia ranks first in JLL’s 2010 survey, followed by Canada and the United Kingdom. Thailand, at 39th, still ranks as “semi-transparent”, one place behind Brazil and one place ahead of Bulgaria.

Phuket’s biggest rivals in the tropical beach property business, the Philippines, Indonesia (Bali) and Vietnam rank a long way behind; the Philippines in 48th place with a score of 3.15, Indonesia at 57th with a score of 3.46 and Vietnam six places from the bottom of the list with a score of 4.25, lower even than such murky places as Pakistan and Kazakhstan.

However, Malaysia, which has been trying to lure property buyers away from Phuket with promises of freehold land ownership and long-term residence visas, ranks 25th – and 2nd in Southeast Asia – with a score of 2.30. Singapore leads in the region, in 16th place worldwide with a score of 1.73.

The survey was compiled from responses to a 20-question survey, with each question having a five-choice answer (1-5), with 1 meaning the market is highly transparent and 5 meaning the market is opaque.

Here is the full list:

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