While foreign investment in Thailand’s property market saw a dip from the Bangkok bomb blast in August, CBRE Thailand reported that analysts and developers believe the sector is resilient, and the long-term outlook in the country is positive.
“The tragic blast at the Erawan [Shrine] has hurt the overall market sentiment a bit. We were quite worried in the week afterwards,” James Pitchon, executive director of consultancy CBRE Thailand, stated. “But the overall state of the economy is a far more important issue driving the performance of the property market rather than a single tragic event.”
Koh Keng-shing, the chief executive of Hong Kong-based Landscope Christie’s International Real Estate, said Ananda, one of his Thailand-based clients, pushed back its latest sale campaign in Hong Kong to late September. He added that none of clients with intentions of purchasing properties in Thailand had backed out of deals in late August because of the bombing.
Pitchon added the Thai real estate market is more domestically driven as opposed to being exposed to foreign capital. The country’s luxury property sector, where prices are usually over USD300,000, are where a bulk of the international investors make purchases. CBRE reported that 20 percent of people purchasing a high-end condo in central Bangkok are foreign, with buyers from Hong Kong and Singaporean leading the way.
The hotel sector and resort related developments might also suffer in the aftermath of the bombing as tourist arrivals to Thailand shrink. Resort locations away from Bangkok have had some insulation from problems in the capital. These types of properties have been popular among foreign expatriates in the past, but since the global financial crisis in 2009, the demand for them has be somewhat slower, analysts note.
“The market is very resilient. It dips down for a quarter or six months, and it comes back up,” Jonathan Umali, director of asset management at Arch Capital, said. Umali is planning a Hong Kong launch for the first phase of the company’s mixed-use luxury development MontAzure in Kamala, Phuket before the end of 2015. The development includes 13 hillside villas and 75 beachfront condos that cost between HKD1.7 million and HKD19.9 million.
