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Political crisis will not spook demand

Wednesday, 17 September 2008

source: CB Richard Ellis/The Nation WEDS September 17, 2008 The recent political crisis in Thailand has unfortunately raised questions among investors, developers and buyers about the impact on the property market in Bangkok and major resort destinations. The announcement of a state of emergency is clearly a concern to foreigners, especially those with limited knowledge of Thai politics. It is clear that some investors have started to react to the political crisis, with many of them adopting a "wait and watch attitude" since demonstrations started in June this year. Other investors with a greater understanding of market fundamentals have sustained their activฌity despite the political climate. Surprisingly, last week, when the situation appeared to be deteriorating quickly, we saw evidence of healthy sales volumes from Thai and foreign buyers in both highend and midmarket condominiums and housing projects. These included projects marketed by CBRE. Property in Thailand is still popular among individual investors because of its lower prices relative to other regional markets. Combined with the cost and standard of living in Thailand, this creates a value proposition that is difficult to match regionally. Buyers of Thai property come from more than 50 countries, including the US, Australia, Asian countries and almost all of Europe. Thai investors too who are now better educated about the market and have begun to invest in high-end condominiums. We are confident that the negaฌtive effects of these political issues are temporary, with no longterm effects on property values or market sentiment. There may be a temporary slowdown in volume but we expect that those who invest in and develop quality projects will find ready demand and a rise in values once the market rebounds.

 

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