While foreign investment in Thailand’s property market declined due to the Bangkok bomb blast in August, CBRE Thailand revealed that analysts and developers believe the sector is resilient, while the long-term outlook in the country is positive.
“The tragic blast at the Erawan (Shrine) has hurt the overall market sentiment a bit. We were quite worried in the week afterwards,” said James Pitchon, executive director of CBRE Thailand. “But the overall state of the economy is a far more important issue driving the performance of the property market rather than a single tragic event.”
Koh Keng-shing, chief executive of Landscope Christie’s International Real Estate, said Thailand-based Ananda pushed back its marketing campaign in Hong Kong to late September. But none of his clients with intentions of purchasing properties in Thailand had backed out of deals in late August because of the bombing.
Pitchon added the Thai real estate market is more domestically driven as opposed to being exposed to foreign capital. The country’s luxury property sector, where prices are usually over USD300,000, are where the bulk of international purchases take place. CBRE stated that 20 percent of buyers purchasing a high-end condo in central Bangkok are foreign, with buyers from Hong Kong and Singapore leading the way.
Meanwhile, hotel and resort related developments may suffer in the aftermath of the bombing as tourist arrivals to Thailand fall. Resort locations away from Bangkok have been insulated from problems in the capital. These types of properties have been popular with foreigners in the past, but since the 2009 global financial crisis, demand for them has been somewhat slower, noted analysts.
“The market is very resilient. It dips down for a quarter or six months, and it comes back up,” said Jonathan Umali, director of asset management at Arch Capital. Umali is planning a Hong Kong launch for the first phase of the company’s mixed-use luxury development MontAzure in Kamala, Phuket before the end of 2015. The development includes 13 hillside villas and 75 beachfront condos that cost between HKD1.7 million and HKD19.9 million.
This article was first published on DDproperty.com, Thailand’s leading property site.
