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Bang On
For all its foibles, the Thai capital remains one of Southeast Asia’s favourite property destinations
| Text : Elizabeth Kerr | Photo : www.thinkstockphotos.com |
The second quarter of 2010 was an eventful one in Thailand, and the eyes of the global news media all turned to Bangkok when mass sit-ins demanding the government be dissolved spread to the city’s tony shopping district and concluded with the forced removal of protestors on May 19. Due to the violence that also erupted, the requisite, and occasionally hysterical, travel advisories hit in full force and had an enormous impact on the city’s hotel trade. From the outside looking in, it seemed like the end of the world. “You don’t buy [property] here in the way you would in Singapore, London or Hong Kong, convinced that this was the right place to make a financial investment,” states David Simister, Chairman of CB Richard Ellis (Thailand), dryly. “Psychologically and even from a political point of view, Thailand is an insane situation.”
Insane, but enduringly popular nonetheless — and seemingly on the rebound. CBRE’s MarketView for the second quarter of 2010 stated that demand for office space and expatriate residential property has managed to stay steady in the wake of the civil unrest and macro-economic figures are generally positive. Prices for new, freehold condominium units rose only 0.2 percent in that period, and by the end of this year, stock in the downtown core will be strong. Serviced apartment supply made the biggest gains, and there will be a whopping 14 percent more available over the previous quarter.
Most investors and second homebuyers associate Thai property with Koh Samui, Phuket and other vacation hotspots. But in actuality, the numbers tell another story. “The urban market has always been much more substantial than the value of the resort market,” explains Simister. “The perception in Hong Kong would have been that the resorts captured more air time — Phuket and Samui are both favourites of Hong Kong buyers. But I would say volume wise there are probably more Hong Kong buyers of Bangkok condo.”
Bangkok is one of Asia’s oddest cities and one that’s difficult to describe. Tokyo is all arts, tech and rigid efficiency (or so goes the belief). Their gleaming towers and banking finesse define Hong Kong and Singapore. Seoul and Beijing are emergent hubs racing to catch up to their more mature neighbours and doing a fine job of it. Bangkok is a bit of all of the above. Simister uses the examples of expatriates ranging from financial services executives to industrialists all opting to settle down in Bangkok after a career — or giving up those high-powered careers halfway through. Citing changes in lifestyle Simister refers to Bangkok as the ideal location for those looking for more than simply a beach resort without the costs associated with Hong Kong.
But that springtime unrest still hangs like a dark cloud over the city. As does 2006’s coup, 1976’s coup, 1973’s revolution and any number of instances of political turmoil in its recent history. Without doing it in so many words, Simister pooh-poohs any lasting fears. “Some [investors] may have considered diversifying, but the market seems to be moving forward,” he theorises. “On the best quality stuff we’ve seen prices firming. There’s been a big wave of new developments on the expanded sky-train and underground project. Some projects are selling out quick enough for some people to use the ‘boom’ word. Which I wouldn’t favour.”
Research by Colliers International backs that up. “In the long term the growth patterns of Bangkok’s residential market will be shaped by the development of new mass transit lines. Affordability will continue to drive the market although it is difficult to envision unit sizes being reduced much further,” said its Q3 Bangkok Condominium Report. “Only when the high density developments are completed can the standard of living for the occupiers be assessed. Developers will be taking a keen interest when these recent launches are finally supplied in order to make adjustments to future projects.”
In whatever way you want to measure value, Bangkok, and Thailand, remains a good one — as evidenced by the continued institutional investment in the second quarter. Dusit Thani, Thai Property and AIA Insurance were among buyers to snap up properties, and developers continued to acquire land sites for condos. Thais themselves are getting into the condo market in larger and larger numbers and they now make up the majority of buyers for those “small” downand midtown one-bedroom units. Things are also healthy in the luxury sector with new supply launches buoying sales.
“We’re still seeing inbound industrial investment. The economy is moving forward, probably at a slower pace than it would if we didn’t have the politics. So it is a weight on the country’s shoulders,” Simister allows. However, “compared to other Southeast Asian countries the infrastructure is pretty good. Even compared to countries that are rich in natural resources, like Malaysia. Bangkok doesn’t look or feel like a Third World city.”
The cocktail of affordability, available property, infrastructure, economic strength and resilience is making Bangkok one of the region’s sprightliest retirement destinations too. “Thailand has a very liveable base. Bangkok has got great restaurants, great hospitals, great schooling if that’s still important,” Simister sums up succinctly. “It’s the most civilised inexpensive place to live.”
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