Thailand is at the heart of the Association of Southeast Asian Nations (ASEAN) – an amalgamation of 10 countries in Asia. Since its formation, this organisation has been catering for the needs of the member countries, in terms of loans, real estate, and services of strategic importance. The organisation is also involved with settling disputes and disagreements amongst the member countries to maintain the peace across the region.
Thailand is set to join the ASEAN Economic Community in 2015, a kind of European Union for this part of the world. It is causing a great buzz and air of uncertainty across the Kingdom as there are many questions when it comes to its impact on the real estate market. Thailand’s property market is a huge industry that is growing rapidly. Even during the tough turbulences of 2010, many huge deals were closed, illustrating the confidence that investors have in its property sector.
The property market is made up of five sectors: industrial, residential, commercial, hospitality and retail, and the implementation of the AEC will most likely impact all of these sectors. However, with the mention of real estate, most people will perceive this to be residential property which may make the public anxious at first, especially with the construction of many new residential properties to accommodate new investors. Chanid Ngowsirimanee, chief executive of Property Perfect, has stated that once the AEC goes into effect in 2015, the residential market for local property firms will expand from 65 million to 600 million. However, this generous oversupply will soon be met by demand once the AEC is implemented.
The execution of the AEC will open Thailand up to many investors in Asia, meaning that higher standards of property development will be applied. This will create a universal standard across Asia and may lead to an influx of investors who demand only the best standards of property. This will revolutionise real estate in Thailand, leading to high standards of property development and high-quality maintenance which will see ASEAN countries coming together to create a highly competitive economic region, an attractive proposition to investors coming to Thailand.
Furthermore, the AEC will open up opportunities for real estate investors in other countries. Investors in Thailand may be interested in moving their property markets to other ASEAN countries including Malaysia, Cambodia and the recently-opened Myanmar. Likewise, investors from other ASEAN countries may view Thailand as a good opportunity to expand their investments. However, this may drive property prices up as more people demand land and property in Thailand.
Although no one is completely sure on how the AEC will impact the real estate market in Thailand, it is expected to bring opportunity to the Kingdom. With loosened immigration laws and higher standards for property development, the AEC is predicted to attract increased real estate investment capital over the coming years. It is reasonable to think that Thailand’s real estate market will continue to grow rapidly after the full implementation of the AEC on December 31st 2015 and investors will come thick and fast to invest in this country. It looks as though now is the time to invest in real estate in Thailand.