Thailand’s property market has experienced only marginal growth during its political crisis in the last six years, and a new government that could bring true stability would be an important factor towards the recovery of its property market, according to a research released by Jones Lang LaSalle (JLL).
“It is clear that confidence in Thailand’s real estate market relies a lot on the country’s political situation,” said Suphin Mechuchep, Managing Director at JLL.
“The recovery of the real estate market, which has been slower than expected despite the strong economic growth witnessed in 2010, exemplifies the case.”
Despite having a tough property market in recent years, Suphin is still optimistic about the future, provided the present government establishes the needed stability.
“With market fundamentals remaining strong, we expect real estate demand to grow rapidly,” she said.
While the entire Thailand economy struggling in recent years, the slowdown took a heavy toll in the office property market. With GDP growth at 4.8 percent, 2.5 percent and 2.2 percent contraction of GDP from 2007, 2008 and 2009, respectively, take up level of office space were approximately 55,000 sq m per annum on average. However, with an eight percent growth last year, average take up level has doubled to hit 110,000 sq m, a significant increase but still below the pre-conflict levels.
Should the new government avoid conflict, Suphin predicts that demand for office space in the capital city to revert to its pre-conflict highs.
“Political stability will allow the Thai economy to grow faster, restore confidence and encourage expansions of both local and multinational companies. All these will translate into demand for offices.”
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