Has the coup in Thailand had a major impact on the property market?


We have been monitoring the Bangkok rental market since the coup in Thailand and we have seen no visible major impact on the property market in Bangkok. There were some fears when it happened but, if anything, both local and foreign property investors were quite expecting it and seem to view the military take-over as supporting a sense of stability after months of unrest.

Bangkok, it would seem, has been quite immune to political disturbances. This has often been true in the past and the disruptions were all temporary and had no real direct impact on real estate. The only time we can recall was during the Asian and global financial crises when capital and rental values started to fall. This time, however, it is just like 2006 and prices in the property sector have remained intact.

That said and bearing in mind that we have actually seen a surge in enquiries over the last month, there are certain investors new to Thailand that have been put off by the political turmoil and have been unwilling to enter the market. Also, property developers have been far more cautious and many have taken a wait-and-see attitude.

According to the larger brokers, buyers of luxury properties have remained blasé to the troubles and view Thailand’s economy as fundamentally solid and have developers have focused their efforts in gaining traction in promoting their projects. Politics, it would seems for this group of buyers, has had a very limited effect on this segment of the market due to interest rates being low.

With little movement, it is of some interest that construction costs have risen by around 10-20% a year and land prices in locations like Thong Lor have risen to 1.5 million baht per square wah. It is therefore unlikely that owners will reduce their rental rates as there is no real need for them to do so as many see the effect of the coup as being “business as usual”.

While there is no question that tourist numbers are way down on the year before but anyone hoping that Bangkok’s property market is due to collapse any time soon could be in for a very long wait.

While certain Westerners cannot quite come to grips with the idea of a military coup, this is only the latest in a long line of coups in Thailand and there have, in fact, been 38 coups since King Taksin’s two leading generals Thong Duang and his younger brother successfully rebelled against him. The latest coup in Thailand is the twelfth successful coup since 1932.

The dollar is now at 32 to the baht, the pound is approaching 55 baht and the euro is around 45 baht, so it is looks as if investing in Bangkok’s property market at the moment could be an attractive option for those that view the country’s future as now having been stabilised.