The turbulent scenes of street protests in Thailand that were flashed around the world on newspaper front pages and television bulletins last weekend will do little to boost confidence in the kingdom’s property markets – at least from an overseas buying perspective.
Just last week Thailand was named one of the top ten most-searched countries by arguably one of Europe’s top property portals, so while the protests so far have been largely good natured and free from violence, anyone looking at investing in the country will certainly be having second thoughts.
Travel advice from overseas countries is one barometer that many people pay heed to. Singapore hasn’t changed its advice for more than two weeks and essentially advises its citizens to be careful. The United Kingdom, as of now, has not changed its advice along similar lines for 10 days. Remember the current protests are not aimed at, or targeting, foreigners so 99.99 percent of trips will be trouble free.
Many unseasoned Thailand observers may assume that periods of political instability will see a drop in property prices. Certainly there’s no evidence that will happen, and during the street violence of 2008 and 2010 prices actually rose significantly. “When there’s blood on the streets …” as the saying goes.
The reason why property prices in Thailand will not be impacted by any short-or even medium-term period of political instability is that Thais – who make up at least 90 percent of property buyers in Thailand – will continue to buy.
The foreign-buying market will suffer – it did in the past and it will again – but it’s just a small although, until recently, growing part of Thailand’s property sector. Many developers, especially those listed on the Stock Exchange of Thailand, have already announced a reduction in new projects for the forthcoming year, so any decline in buyers may well already be factored into the equation.
Last week when DDproperty.com spoke to agents around the country, views were mixed. I suspect views will be much more polarised now, and many who deal with a significant number of overseas buyers will be seeing a drop in enquiries – even in locations hundreds of miles from Bangkok. People see Bangkok, think of Thailand as a whole and their minds are made up.
For those who understand Thailand, they will understand this is the way that Thais do things. I’ve lost count of the number of coups, states of emergency, etc, that have happened in my short association with the kingdom – and personally I would not be put off investing in property here – even given the uncertain short-term future. Ultimately the kingdom offers great value for property investors and is a genuinely nice place to live. With prices generally 20 percent those of Singapore on a like-for-like basis, the kingdom is still worthy of close attention from overseas property buyers and investors.
But I’m probably in the minority right now, and foreign buyers will only be back in force when the current political chaos is resolved. That could be a while away yet.
Andrew Batt,
International Group Editor of PropertyGuru Group, wrote this story. To
contact him about this or other stories email andrew@propertyguru.com.sg
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