Thailand’s economic growth dipped in 2013, mainly due to exports taking a hit, especially the government’s calamitous rice pledging scheme, soaring household debt and a tapering off of consumption and investment. By December, added woes affected Thailand’s GDP figures as political tensions rose and street protests started to take its toll on the economy.
Thailand’s precarious political fallout further dampening its economic and while economists expect the country’s GDP to grow by just over 2 per cent, with forecasts having been revised downwards. However, all of these negative economic factors hardly made a dent in Bangkok’s property market and it remains relatively unscathed.
Even though unfavourable conditions will no doubt persist throughout much of the year, demand across all Thailand’s property sectors is still robust, as illustrated by steady growth in both capital values prices and rents, as well as the introduction of new supply.
In the condominium sector most of the new projects being rolled out were well received, especially those close to BTS and MRT stations and average prices continue to grow amid stiff competition. Bangkok’s commercial property sectors performed well in 2013 as limited supply and strong demand drove occupancy rates and rents to all-time highs.
Across Bangkok, office occupancy is still around 90 per cent and rents have been increasing. In the retail market, occupancy is hovering above 90 per cent and rents have increasing. According to a spokesperson at Jones Lang LaSalle in February this year, “strong fundamentals helped save the Bangkok property market in 2013 but at this point, it remains hard to predict where the market is heading in 2014.”
From the experience of witnessing previous spells of political unrest, it does suggest that any impact on property prices will almost certainly be short lived and the effect on Bangkok’s property market are limited. Although there remains a certain degree of uncertainty created by the protests and the subsequent coup, economic growth has seen a downturn as foreign direct investment has been ebbing in comparison with neighbouring countries in recent years.