Experts agree time to buy Thailand is now

With this question on the lips of many, experts from Thailand spoke exclusively to PropertyGuru.com.sg. to give their views as to whether now is the right time to buy property in the Kingdom, and offer words of advice to anyone reconsidering their options after last month's military intervention.

Part one asks whether now is a good time to invest in Thailand property, and if so why?

Simon Landy, Executive Chairman, Colliers International Thailand.

A. The Thai property market, like the Thai economy overall, is characterised by resilience. During the recent years of upheaval and political strife, demand has remained strong and prices have continued to escalate. The rate of price increase is not as sharp as in some markets, but then the risk of a price crash is also lower. This makes Thai property a strong asset class for investors looking for a reasonable yield and capital appreciation. In the longer term, the property sector will continue to benefit from the country's three key strengths: its location, its resources and its people.

Cees KC Cuijpers, Managing Partner, Town & Country Property, Chonburi.

A. It is always a good time to invest in good properties. No matter what market-scenario, the property industry remains strong and good deals are always to be made. Looking at Thailand's Eastern Seaboard at the moment, I can't get enough quality executive rental properties in my portfolio because demand out-strips supply. Explosive and continuous growth in the Eastern Seaboard industrial estates never seems to end.

Sorapoj Techakraisri, Chief Executive Officer,PACE Development Corporation Plc

Our clients tell us that the decision currently is relatively easy to make, since the Thai baht is a little weaker which is a short term issue. Long-term they still see the upside for Thai real estate and Bangkok inner-city prime luxury developments in particular. It is just that the time to purchase now is for an international buyer, and is slightly cheaper than previously due to currency fluctuations.

Chanond Ruangkritya, Chief Executive Officer, Ananda Development PCL.

A. Thailand has faced several years of political instability that have acted as a headwind for Thai property prices. This has led to Thai property prices being below the expected value for a nation in Southeast with its level of per capita GDP. In particular, the development of a mass transit system is an opportunity to participate in a revaluation of Bangkok property based on this significant infrastructure investment.

Suphin Mechuchep, Managing Director, JLL – Thailand.

A. While Thailand has suffered from many political disruptions over the past decade, its real estate sector has proved to be resilient. Despite the latest seven-month political unrest, followed by the May 22 coup, rental and capital values in most property sectors continued to grow, though at a slower pace. Strong fundamentals in Thailand's real estate market count for a lot, with most property sectors seeing a pretty good balance of supply and demand.

David Smith General Manager, Lifetsyle Property, Bangkok.

A. People would perhaps think so, yes, but in truth not much has changed. There are a few motivated sellers out there that just want out, but by no means at 'any price necessary'. Most Thai owners are owners of many properties in Thailand not just one and thus often are not in urgent need of selling off assets as they are quite independently wealthy.

What I would say is that now is not a bad time to buy here. I am sure a lot of people are wondering if they should wait and see how politics here pan out in the next 12 months before committing, but in truth nothing has or will change in terms of asking prices and transaction prices. That said, what may change for overseas buyers is the exchange rate. We could see the baht slide further against a few other currencies this year, and thus waiting until the last quarter may be advisable.

David Wade, Managing Director, Tropical Homes Real Estate, Phuket.

A. Though it may not appear obvious, there has probably never been a better time to invest in Thai property - and I am not attempting to hype up the market. It is simply a fact for the following reasons.

Firstly the coup has frightened some potential investors who have little knowledge of Thailand whereas those who are familiar with the ins and outs of government recognise the coup was nothing more than a way to bring about an end to the ongoing conflict. This has however caused sellers to consider offers they might have previously refused. I had a case in point just a few days after the coup. A seasoned Singaporean investor client of mine managed to pick up two condos at a price the owner had previously refused because he was worried the coup might last a few months and he did not want to wait. I have had many similar instances since. My experienced Singaporean stated that there is no such thing as a true democracy in Southeast Asia, and for Thailand coups are just another way of restoring the status quo. Unfortunately the very word conjures up vivid hostile imagery to the average westerner and might scare less knowledgeable investors. Motivated sellers and developers may not want, or be able to afford, to wait and are therefore offering incentives to those clients who are willing to buy now. Very recently a few developers I know have introduced incentives, discounts or gifts, which immediately prior to the coup they would not have even considered.

Secondly the Thai baht has weakened significantly as a result of the coup making Thai property prices look extremely attractive when compared with the region.

Thirdly Thailand still has so much to offer compared to its rivals. Its infrastructure is improving constantly and it is attracting more high net worth residents as the quality of life on offer to those individuals improves. New luxury malls like Central Embassy are testament to this.
Finally I would remind those thinking of investing to recall that the best time to buy is when everyone else is selling, to go against the tide. Ironically I have made more sales, to professional investors, since the start of the coup than during the same time last year but seen a big reduction in the number of enquiries. Most people are like sheep and as lambs to the slaughter buy at the peak when everyone else is doing the same so bargains are rarely available. By then the smart money has moved on, as James Goldsmith said 'when you can see the bandwagon it's too late to jump on. The bandwagon is currently just out of sight.

Clayton Wade, Managing Director, Premier Homes Real Estate, Pattaya.

A. Now that the Thai political turmoil has been neutralised, it is a great time to jump in and invest in the Thai property market. Thailand has been an absolutely great place to invest in during these last ten years or so (since 2003) as land and property values have continued increasing in value almost nonstop since they began their more than ten year climb. Pattaya for instance had luxury beachfront condominium prices at around THB30,000 per sqm back in 2003 and in a short ten year period we have seen beach front condominium prices recently hitting the THB200,000 per sqm mark and those prices are only going to get higher. It's the weather, the food and the wonderful Thai people that just keep breaking records bringing in more and more tourists and property investors fuelling the Thailand real estate sector.

Part two next week will ask these same experts what would you say to anyone considering buying Thailand property, but who may have been having second thoughts since the military intervention in May?

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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