A boom in Thailand’s property market is predicted and that economic growth in Thailand will reach 5 per cent next year when the domestic recovery finally starts to kick in later this year. However, economic growth forecasts have been revised downwards for 2014 to between 2-2.6 per cent after the protests in the first half of the year. Overall, Southeast Asia’s outlook is also set to improve and the property markets across the region have seen advances.
However, Thailand needs to address certain challenges before it can be considered a balanced, stable and sustainable economy. Some reforms have been carried out but it needs to do more, especially upgrading educational quality and strengthening the agriculture sector. As regards agriculture, in order to create greater productivity, income and employment, the country needs to further pursue its efforts in modernising technology and educating farmers.
However, according to the Singapore Institute of International Affairs, it does appear that the whole of Southeast Asia could face slower growth than before, and the region’s growth is now expected to be only 4.7 per cent. This is mainly due to political and economic hotspots in Thailand, Indonesia and Vietnam.
In Thailand, the political deadlock in the first half of the year dampened the country’s growth prospects, but when the temporary cabinet has been announced and installed, Thailand should see a return of economic stability. Nevertheless, there are opportunities in the months ahead for Southeast Asia, as there are rising labour costs in China, which should provide the region with more growth due to its cheaper labour. Also, with the establishment of the Asean Economic Community, the region will have a more integrated production base and a combined economy of 600 million consumers.
All of this bodes well for Thailand’s property market as economic recovery is due to happen over the next few months when the revival of domestic investment projects and economic stimulus measures all add to Thailand’s projected expansion. If the planned property development projects are consistently implemented, then spending will almost certainly follow. Some analysts believe that next year growth could climb to as high as 5 per cent. And, as the global economy gradually improves, so will Thai exports and its property market.
In the latter half of the year it is expected to see improvements in both consumer and investor confidence. Property funds that trade on the Stock Exchange of Thailand have grown as they are listed vehicles which are subject to strict governance and regulation have provided more transparency to Thailand’s property estate market, which in turn has assured investors.