{"id":26722,"date":"2016-09-21T13:24:05","date_gmt":"2016-09-21T06:24:05","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/property-news\/why-luxury-real-estate-in-thailand-remains-a-solid-investment\/"},"modified":"2016-09-21T13:30:28","modified_gmt":"2016-09-21T06:30:28","slug":"why-luxury-real-estate-in-thailand-remains-a-solid-investment","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/why-luxury-real-estate-in-thailand-remains-a-solid-investment\/","title":{"rendered":"Why luxury real estate in Thailand remains a solid investment"},"content":{"rendered":"


\nBut only for buyers willing to play the long game
\nA strong sales rate at The Ritz-Carlton Residences in Bangkok\u2019s tallest building, MahaNakhon, proves there\u2019s still a strong appetite for ultra-luxury accommodation in the Thai capital. Image: apiguide\/Shutterstock
\nThailand has for years represented something of a paradox for economists and investors. While traditionally more stable than some of its regional neighbours, the nation has experienced more than its share of political and social upheaval. Yet despite 21 different constitutions and 19 attempted coups \u2014 a dozen of which were successful \u2014 in less than a century, the country\u2019s markets have proved remarkably resilient.
\nThe economy rebounded after the Thai baht all but cratered in the Asian Financial Crisis of 1997 and surged again in 2012 in the wake of devastating floods that caused more than USD45 billion in damage and left more than 800 dead. Through it all, property values remained relatively consistent or increased, encouraging a building boom that has left Bangkok\u2019s CBD littered with glitzy high-rises. So impressive was the country\u2019s ability to shrug off setbacks throughout the 2000s that it earned the nickname Teflon Thailand.
\nRecent political upheaval has again raised questions as to just how durable that non-stick veneer might be.
\n\u201cIt is widely accepted that the Teflon days have passed,\u201d says Risinee Sarikaputra, research and consultancy director of Knight Frank Thailand. \u201cWe are now facing new challenges in our overall economy such as our continually declining exports, which we depend greatly on, and a global economy no longer functions the way it used to.\u201d
\nRelated: Thai developers chasing overseas investors\u00a0
\nThe Erawan Shrine bombing last year, a spate of smaller attacks this year, and the smouldering insurgency in the south have cast a shadow over the tourism industry, while the presence of a military government and other dark clouds on the horizon\u00a0have left some foreign investors skittish. A decade ago the Thai economy was one of the fastest-growing in the world. Growth continues today but at a rate well below that of fellow ASEAN nations such as Indonesia, Philippines and Malaysia.
\n\u201cProperties at the top end of the market in Bangkok\u2019s CBD and central districts have performed consistently well in recent years\u201d
\nSarikaputra suggests that short-term investment might not be the wisest decision in light of the slowing growth. Nevertheless, she retains an optimistic outlook.
\nWhile renowned for its congestion and overcrowding, peaceful pockets can still be found close to Bangkok\u2019s CBD. Image: Panya7\/Shutterstock
\n\u201cWe do feel that most affected by the current economic situation would be speculative buyers who purchased units for the purpose of quick resell,\u201d she says. \u201cThailand remains a positive long-term investment option. Properties at the top end of the market in Bangkok\u2019s CBD and central districts have performed consistently well in recent years.\u201d
\nIt\u2019s a sentiment that many have echoed and the general consensus seems to be the luxury sector of the Bangkok property market will remain a solid investment for the foreseeable future. \u201cExperience shows the market is highly resilient,\u201d says Bunthoon Damrongrak, head of Residential Project Sales at JLL Thailand. \u201cDemand for condominiums in Bangkok has remained very strong. JLL has seen increased interest from foreign buyers who are looking for condominiums in Bangkok, particularly from Hong Kong, Singapore and China.\u201d
\nAccording to the Bank of Thailand, the Bangkok housing index rose by 4.9 percent last year and the condo index rose by a full 14 percent. To meet demand the city continues to build at a brisk rate. Roughly 40,000 additional upmarket condo units will be completed by the end of 2016, bringing the total stock up to 446,000, or almost double that of 2012, according to JLL\u2019s Thailand Property Intelligence Centre.
\nBangkok\u2019s property market has always been dominated by domestic investment. According to a study by Knight Frank, Thai buyers represent 76 percent of the total market. While some are purchasing condos strictly as a future investment, many are doing so with the intention of living in them. Over the last couple of decades, affluent young Thais have become less inclined to live with their parents into adulthood. This rising demand for high-end, urban residences in desirable neighbourhoods around Sukhumvit Road and Sathorn has served as the backbone for the local luxury market.
\n\u201cAny market needs to be really underpinned by domestic demand,\u201d says James Pitchon of CBRE. \u201cIf it relies on foreign demand, that can be fickle and fluctuate depending on currency changes or measures to restrict foreign purchasing.
\nWhile the luxury market in downtown Bangkok is still roaring along, the situation in other parts of the country, especially those without the benefit of a beachfront location, is looking less rosy.
\nRelated: Find out who is up to win at the Thailand Property Awards 2016
\n\u201cProvincial real estate, even in supposedly prime markets such as Hua Hin, has been very slow,\u201d says Pitchon.
\nThough much of this has to do with the country\u2019s generally sluggish economy, a number of diverse other factors have come into play. Pitchon points out that the weak rouble in Russia has taken its toll on locales such as Hua Hin and Pattaya. Economic ructions at home have left Russian high rollers hoarding their cash rather than splashing out on pool villas.
\nPhuket has fared somewhat better, but the volume of sales is not terribly high and demand for ultra-luxe villas costing THB100 million or more \u2014 previously one of the most sought-after categories \u2014 has been waning, according to a 2015 report by Knight Frank.
\nPhuket, always popular for its beauty, has also suffered from corruption. Image: Buntoon Rodseng\/Shutterstock
\nAn ongoing government crackdown on corruption on the holiday island may also work in the island\u2019s favour. Since 2014, military officials arrested more than a hundred unlicensed taxi and tuk-tuk drivers and wiped out illegal commerce on the public beaches. Vendors selling tacky trinkets have been replaced instead by armed guards. Though it is hard to say at this stage if the new regulations will directly impact the value of beachfront real estate in the long run, Phuket\u2019s coveted coastline certainly feels more ordered. The island\u2019s infrastructure is still flawed, but a long-delayed, promised expansion of the international airport towards the tail end of 2016 may help bolster foreign interest and investment.
\nRelated:\u00a0Phuket Town is easily one of Thailand\u2019s most endearing enclaves
\nOn the whole it seems that the country is no longer impervious to economic blows, but that has not deterred investors at the upper end of the market. \u201cThe Thai property market is in a special position where the poor economic climate is offset with land scarcity,\u201d says Sarikaputra. \u201cThat\u2019s why the property market has outperformed the overall economy in the past few years.\u201d
\nAnalysts seem confident that Thailand will roll with the changes, very much as it has previously done. \u201cThe property market is driven much more by the rules of supply and demand than Thailand\u2019s constantly changing political situation,\u201d says Pitchon.
\nFortunately for high-net-worth investors, the market\u2019s strong domestic base ensures that there will be a reasonable demand for well-constructed residential units for many years to come. The country\u2019s natural beauty and status as one of the world\u2019s top tourist destinations give its property market a staying power that transcends political fluctuations.
\nRead next: Phuket market still relatively stagnant
\n
\nSource : property-report.com
\nRead more…Why luxury real estate in Thailand remains a solid investment<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

But only for buyers willing to play the long game A strong sales rate at...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-26722","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-6X0","jetpack-related-posts":[{"id":66186,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/thailand-positioning-itself-as-haven-for-luxury-complexes-for-the-elderly\/","url_meta":{"origin":26722,"position":0},"title":"Thailand positioning itself as haven for luxury complexes for the elderly","date":"September 12, 2017","format":false,"excerpt":"\r Investors are on the march to cash in on Thailand\u2019s ageing demographic, with two new retirement home projects worth a combined 10 billion baht (US$301 million) to be launched in the fourth quarter. 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