As economic integration nears and the Asean Economic Community (AEC) prepares for Southeast Asian unification, the affect on Thailand’s property market will be that it looks certain to substantially benefit. While the massive fly in the ointment at the moment is Thailand’s political squabbles, with some Bangkok businesses hijacked and foreign investors scuttling away for the time being, the immediate impact of the protests is the country’s economic development. However, we are optimistic that a solution to the current crisis will be found fairly soon.
As Thailand is the bloc’s second largest economy and an operational hub for business, investment in the Thai property market has a great future and is expected to continue to grow, with Bangkok leading the way. For the past couple of years the government has been highly active in raising awareness for the onset of the AEC, with Bt8 billion spent on preparing the country for integration by organising events and seminars.
While the Asean campaign has quietened somewhat of late due to the political turbulence, regional and international brands are actively looking to open retail outlets in the shopping malls of Bangkok as it is thought the city could become the mecca for shopping across the region. Some of these large-scale shopping mall projects are already under way at locations such as Central West Gate, Mega Rangsit and Mega Bang Yai.
Yet perceptions among Thai people remain guarded, with fear of job losses and a sense of being overwhelmed by a flood of migrant workers. Also, the language of Asean is English and many feel they are not fully equipped to deal with negotiations and communications in SME companies, meaning there’s a worry that to effectively compete with the other members of Asean using this medium will put Thailand at a disadvantage. This is the reason why the Ministry of Education spent over Bt500 million to improve English skills among students.
While it is true that there is a shortfall in the abilities of the Thai people to speak English fluently and, as surveys have proved, English proficiency is not one of Thailand’s strengths, on the issue of an influx of foreign migrant workers, the opposite to the perceived norm is true: there will only be free movement of labour for professional workers among Asean’s member states, which includes engineering, architecture, medicine, dentistry, nursing, accounting and natural resources.
In October last year the OECD Development Centre predicted that the economic outlook for Southeast Asia, China and India is “robust over the medium term, anchored by the steady rise in domestic demand” and that it will “stay resilient over the 2014-18 period, with an average annual growth of 6.9%”.
In addition to this, Bangkok’s infrastructure will see the new extensions of the mass-transit lines coming on stream, which will be major drivers in the residential development of the city, especially for condominium projects, which are already under construction and scheduled for completion by time Asean kicks in.
While this is all good news for Thailand’s property market, the new government should be thinking about ways to mitigate the differences with its neighbours with regard to direct investment, as the foreign equity ownership issue will continue to dog the nation if it fails to be addressed intelligently.
While Singapore will remain the commercial and financial hub, economies across the region are expected to grow. Thailand is likely to continue with its robust domestic investment into commercial and residential properties and the expansion of retail malls and, as a result, the real estate industry is likely to progress in the Southeast Asia region, as housing and education needs will translate into a boost for Thailand’s property market.
Now is surely a good time for investment in the Bangkok property market. We have a large stock of properties you can view at our Condos for Sale in Bangkok page.