Bangkok’s real estate market will receive a big boost in 2015 when the members of Asean open their economic borders to enjoy all of the advantages of having free movement of goods, services and capital. The community has learned some hard lessons from the European Union in that the free movement of labour will only apply to certain professions and that there will not be a single currency.
The union will be a formidable economic bloc, with a market of over 600 million people and its combined GDP will make it the eighth richest market in the world. At the beginning of this week the prime minister of Singapore, Lee Hsien Loong, called on Asean to redouble its efforts to integrate the economies of the group’s ten member states and accelerate community building.
Asean as a group is already exploring new ways to deal with other parts of the region and the world in general and are negotiating an FTA with the EU and other major economies in Asia, namely China, Japan, South Korea, India, Australia and New Zealand as part of the broader Asia region. They are also in talks about a transatlantic partnership with America and a dozen or so countries on both sides of the Asia Pacific such as Chile and Peru.
The group are busily finding new ways to upgrade themselves to improve the lives of the people that will live under the Asean umbrella through economic growth and by transforming each individual country’s economy. This involves investing in infrastructure projects, people, training and education to make them more productive.
Asean countries are however cautious about the rate of change and issues of integration into their societies, meaning management. Countries need to be able to easily adapt to the inflow of new immigrants that are bound to move to the wealthier countries within the region. The objective is to find ways to influence net migration in a possitive manner so it is not so overwhelming as to dilute a country’s core values. The aim is targeted at people who will make their new country more economically efficient due to their new range of skills and talents.
So what will this mean for Bangkok’s real estate market? Bangkok is placed in an ideal position geographically to take full advantage of the single market. It has air links to all of the other nine capitals in less than three hours and is set to become a central hub. Its main airport, Suvanarbhumi, is to be expanded to handle around 100 million passengers per year and the effect of this is that it will be convenient for Asean citizens to either live or commute to Bangkok. It would also serve to stimulate the need for businesses to expand their operations into Bangkok.
The upshot of this will be that there will be increased demand for real estate in Bangkok, for both rentals and sales. Many of the new condos that have been built near to BTS or MRT stations are already available for the buy-to-let rental market. Then, of course, there is the idea of Bangkok becoming the shopping mecca of the region and the massive expansion in the shopping malls in Bangkok has already led to regular weekend visitors coming to buy luxury goods. This has led to a rise in Asians buying and renting real estate in Bangkok.