Many people emigrate to other countries looking for opportunity in their lives. They see it as a chance to have a better life than back home. Of course it is an adventure as well and perhaps there is a romantic element linked to their decision, but most expats who become 'permanent' residents of Thailand or Bangkok only do it if their lives are improved in the process.
Of course Thailand is dubbed a 'Developing Country' therefore the moniker of a 'land of opportunity' comes with such a term. With alleged fortunes to be made. Well no one can promise fortunes, but here are a few reasons why investing in real estate in Bangkok may be a shrewd move you could take.
1. Thailand is a Developing Nation
Unlike the home countries of most Ajarn.com readers, such as the USA, UK, and European nations, Thailand's GDP increase year on year is significant. In Europe, UK and USA we are lucky to get growth rates of 2% or at the very most 3%, whereas Thailand looks for regular growth rates of between 5-7%. Look at the graph below from the world bank that illustrates how this has affected the individual wealth of Thais in the lat 50 years.
Some foreigners I speak to believe the growth has happened and it's over. But the graph above suggests quite the opposite. In fact apart from 1997 and 2008, the graph looks to be getting steeper, i.e. Thais and Thailand are getting richer, faster!
2. Real Estate in Bangkok is going up
Again for years now I have been told by well-educated, successful and informed foreigners that Bangkok's property bubble is going to burst. There are too many condos, hotels, apartments etc being built, and it will only be a matter of time before it all comes crashing down.
Well I have been told that consistently for 8 years when we started our business and in that time property prices in Bangkok's city center have more than doubled. From 50 000 Baht/sqm back in 2005 to approximately 110-120 000/sqm for a good quality condo in central Sukhumvit between Asoke-Thonglor.
Yes of course there may be a future correction (all markets experience one once in a while), but the chances of a 50-60% drop in prices to get back to 2005 levels is almost impossible. In fact even a 20% drop would be huge and unlikely.
3. The AEC is coming in 2015
Yes I know there are some disputes to rectify and it is not a foregone conclusion, but even the thick-headed politicians with their own personal agendas realize that a bigger market with more freedom to move capital, labour and goods and services will in the long-run be of huge benefit to Thailand and the biggest individual benefactor will be Bangkok.
However poor you think Laos, Cambodia and Burma (Myanmar) are, you can be sure there are some massively wealthy individuals who have vast sums of money just waiting for investment. Countries such as those named and indeed Vietnam and Philippines don't have the range of real estate Bangkok possesses. Therefore for a quick way to invest their money safely these individuals will be looking at cities like Bangkok and investing heavily. Just like rich Arabs invest in London and other European cities as their own countries do not have the range of investment opportunities available.
The bottom line is a huge influx of foreign capital from the region and beyond into Bangkok will boost property prices. So now is the time to buy.
Yes I know as a foreigner we despair at how inadequate the Bangkok infrastructure is. Compared to cities like New York, Tokyo, Sydney or London it is poor. With a population of 12-15million (depending which figures you read). Yes it's true the approximately 50 stations that make up the BTS and MRT system at present are hardly adequate. But then that is a lot more than most cities in SE Asia have.
Look at Jakarta, an even bigger city - 17 million - and an even richer country - part of the G20 - and yet not a single BTS or MRT equivalent. Ho Chi Minh, Hanoi, Phnom Penh, Yangoon, the list goes on. Even Kuala Lumpar's system is tiny! Only really Singapore in SE Asia makes Bangkok look inadequate on metro systems.
And it's improving fast. Just travel to Bang Son, Talingchan or Kae Rai and you will see huge infrastructure projects nearing completion. With miles and miles of track both raised and underground.
Again going back to point (3) if you were a rich non-Thai which city would you buy real estate in? One with no metro system or one with an existing and rapidly expanding one?
5. The sheer size of Bangkok
Yes it's true Singapore is better organized, yes it's true they have a better metro system, road system and things run much smoother. But they have huge advantages in that they only have 6 million people in the whole country. They are a city state so they can block transport into the city easily. And they are relatively tiny.
Bangkok has at least double the population. Bangkok also has 55 million other Thais needing and wanting access to it whenever they want. But this in the long run is to Bangkok's advantage.
Larger populations generally lead to faster growth, more wealth and certainly more demand. As more and more Thai's urbanize themselves, they will need accommodation. Inexpensive at first for most newcomers, but as Thai wealth increases (see the graph in point (1)) so will their demand for mid-high end real estate.
6. The airport and shopping plazas
I'm sure I am not the only foreigner that sniggers every time I see a large space of land in the city center cleared and then 2-3mths later the rumor or the bill-boards come out confirming yet another shopping mall being built - 2 stations down from the last new one.
However this vast shopping infrastructure is rapidly turning Bangkok into the shopping mecca of SE Asia. It used to be that Hong Kong or Singapore were the places to go to shop, but these days nothing in SE Asia compared to Bangkok. And once again the opening up if the AEC will boost this even more.
Already rich Cambodians, Lao, Burmese and not to mention Chinese, Indians and Pakistanis are flying to Bangkok in their millions each year to explore the shops of Bangkok. Their countries either do not possess the luxury of the shops in Bangkok, or do not possess the range.
I know two people very well who have lived extensively in both Hong Kong and Jakarta and tell me that in their respective cities they can only buy very low end goods or very high-end goods. So they have to come to Bangkok to get the mid-ranged items we take for granted here and in the west.
7. The ease in which to live in Bangkok
Without going into discussions or comments on either race or religion it is clear that of many of the SE Asian destinations on offer, Bangkok offers one of the easiest and most relaxed ways of life.
It's relaxed and accepting culture allows foreigners to live here very easily and comfortably, without too many rules and regulations that conflict with our own up-bringing.
Many foreigners come to Bangkok planning to stay a few years at most and never leave, realizing that not only does Bangkok offer a more relaxed environment than most other options, but also more than their hometown perhaps did.
8. Property prices in Bangkok
As mentioned above so far, Bangkok's infrastructure - as inadequate as it is - trumps most of its rivals in the region. In fact only Singapore offers a more comprehensive system and even then dealing with a much smaller city and population.
I of course realize that Hong Kong is not technically part of SE Asia, but it is both a well known and popular expat destination and I have mentioned it above, so I will drag it into this point as well.
Bangkok may be trumped by Singapore and Hong Kong on the infrastructure stakes, but at what cost? Well it may surprise you to know that city center properties in Singapore are on average 6 times more expensive than the Bangkok equivalent and Hong Kong even more expensive at 8 times the price. Therefore showing Bangkok to be pretty good value for money.
Also with that level of differential, it gives plenty of scope for the gap to be narrowed.
9. Surrounding areas
Again where Bangkok trumps the likes of Singapore, Hong Kong and even cities like Jakarta are the surrounding areas. If one lives in Hong Kong or Singapore they almost invariably have to jump on a flight to go somewhere, as it is hard to impossible to 'get-away' for a weekend or a few days inside these cities.
The there can be the hassle of visas and of course the cost of international travel, not to mention the time. Whereas if you're and expat in Bangkok, you can just drive to a beach or a national park within a few hours and be in a totally different environment.
And it's inexpensive too. A train to Hua Hin can be less than 100 Baht and to Ayuthaya less than 50 Baht, and both offer completely contrasting environments to Bangkok and can be a lot fun.
10. The Weather and Food
I'm sorry I'm not even going to present an argument here. There is simply no place in SE Asia where the two combine better. Yes of course almost all of SE Asia is hot, but can they offer the culinary delights of Bangkok? In my experience the answer is No!.
The only city that comes close on the culinary front in my opinion is Hanoi, with its blend of Vietnamese cuisine and French flair, but even then it gets cold there in the winter and rains at the same time, a grey day there can be like being back in the UK.