By Andrew Batt:
Thailand’s property industry needs to tackle the issue of professional property management to ensure current developments maintain their appeal to buyers and investors.
To mark its 25th anniversary in Thailand, property consultancy CBRE gave its predictions for the residential and office property markets in the kingdom. It also gave its opinion on the challenges and opportunities that lay ahead.
It said one challenge is professional property management. All too often, high quality developments fail to appreciate on completion and deteriorate rapidly due to the lack of expertise and insufficient budgets to maintain their values over the long-term. Without good property management, properties which should become an appreciating asset can become a depreciating consumer durable which is illiquid.
CBRE said the whole industry needs to revisit its approach to property management and take a more professional and more pragmatic approach. Co-owners must also realise the necessity of raising CAM fees in cases where the budget is insufficient to manage and maintain a property effectively to a high standard. It is vital to the property market to ensure long-term appreciation where quality is sustained. For example, selected quality buildings in Bangkok age significantly within less than 10 years, whereas 100-year-old properties in Manhattan and London continue to appreciate and remain prime investments.
Another challenging area is property taxation, the consultancy said. The tax system is complex and does not support constructive growth in the market, both in its approach on tax on rental revenue and upon property disposal. The current taxation system neither benefits the investors nor the government. In many circumstances investors are double taxed with the property tax on rental income and personal income tax.
Amongst the challenges, the market also offers plenty of opportunities for the years to come. With the integration of the ASEAN economies through AEC, Thailand appears to be one of the most highlighted markets. Given its’ strategic location as a regional hub and proximity to borders of emerging economies such as Myanmar and Laos, its property market stands to benefit in various sectors from offices , serviced apartments and residential leasing to hotels.
In summary it said that the Thailand property market will always present challenges and opportunities. The key to succeeding in any market condition is the ability to adapt to the changing trends and the need for quality personnel and a strong team.
Andrew Batt, International Group Editor of PropertyGuru, wrote this story. To contact him about this or other stories email andrew@allproperty.com.sg
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