It is not surprising that foreign investors are uncertain about investing in Thailand’s real estate market due to the negative publicity it has received recently. The military coup and the tragic case of British tourists murdered on Koh Tao have discouraged people from visiting the Kingdom. The press has even named the country as a ‘dangerous’ destination that should be avoided. But should developers boycott Thailand and look for investment opportunities elsewhere in Asia? Here’s how 2015 looks for Thailand’s real estate market:
Real estate investment volumes have improved greatly for the first time since the beginning of a prolonged period of political crises and military unrest and show no signs of slowing down. Despite the negative press that Thailand is currently receiving, the real estate sector looks promising for 2015. Now that the country is starting to stabilise, it is starting to look like a much more attractive investment opportunity, set to continue in 2015. The Kingdom has a long history of military coups, with the army having staged 11 since 1932. However, the economy appears unfazed by the political unrest and has grown by an average of 5% annually from 1999 to 2007.
Thailand’s involvement in the AEC in 2015 is expected to have a positive impact on the property market due to the free-flow of trade and services and opening-up of other AEC countries. The Chief Executive Officer of Pace Development, Khun Sorapoj Techakraisri, has stated that once the AEC has been fully implemented in Thailand, momentum will build very quickly and outbound investment will increase exponentially. International firms will look to move their headquarters and production to the country due to the low cost of living, solid worker productivity and ease of access to the rest of the world. In turn, this will lead to an increased demand for commercial and residential space throughout the country – an ideal investment opportunity for foreign investors.
Furthermore, upon joining the AEC, the standards for property developments will improve to keep up with international standards, providing a new appeal for international residents. There are currently very few prestigious properties in Thailand that meet these international level standards. Demand for these will grow throughout the country as more expats look for these properties to rent.
Thailand faces some uncertain times ahead for many of its markets. Although some may take longer to recover from the military coup and devastating negative press the country is receiving on a daily basis, the real estate sector appears to be very much unaffected by these events. Thailand continues to look like a destination of increasingly promising investment opportunities, set to continue in 2015. As a result of the country joining the AEC next year, demand for property is expected to increase, giving property investors and developers a great opportunity for return on investment.