Neil McDonough

Real estate since the coup

Property developers are putting their trust in the new regime.


Before starting on this blog, it seems poignant to make it clear that this regular real estate blog is primarily about Bangkok real estate and not a soap-box to air political views. Like most expats that have been living in Bangkok a good number of years, I have no affiliation with one political movement or the other. The Yellow and Red shirts to me seem to be pretty much as good and bad as each other and once in power there is little to choose between them. So I will be keeping any political views I do or don't have, out of the following article.

Also like most expats in Thailand in whatever industry we work in, all we want is political and more importantly economic stability so we can get on with our daily lives and livelihoods, something in short supply in the years I have been living in Thailand.

Despite the disparaging reports the Western media seem to revel in when referring to the current so-called military junta that governs in Thailand at present, most expats I have encountered in all types of workplaces in Thailand seem to think the Thai army have brought a much needed stability to Thailand.

Of course the biased Western media who sometimes don't understand a situation fully, prefer to report on sensational, if not ludicrous stories, rather than doing a bit more research to report the truth. A rather comical such report appeared in the well-respected Times newspaper in the UK last week claiming how people were protesting against the Thai Army by publicly eating sandwiches is typical of such international views.

However for seasoned expats in general, life has rarely been more stable in Thailand. And how has this affected the Thai real estate market?

To answer the question I have to divide the answers between short-term and long-term.

In the immediate aftermath of the coup, many embassies, governments and international companies or investors immediately blackballed Thailand, a typical knee jerk reaction. Suspecting the worst and no doubt egged on by the Western media they warned their respective citizens to avoid Thailand for the foreseeable future.

Of course armed with such official warnings, many expats who had planned to come and work in Bangkok decided against it, after all when your own officials warn you, it is natural to think that they know better. This of course led to a relatively quiet period for Bangkok real estate as the market had to find its feet in this new military-run Thailand. Markets of any sort hate uncertainty and when uncertainty is all that people can see they naturally prefer to sit it out, and wait.

Fortunately for the Bangkok real estate market, the short-term passed fairly quickly and within 4-6 weeks, the market and certainly the expats already living in Thailand realized that the new regime were fulfilling promises, and acting as a stable force. In fact the announcement that their rule will last over a year brought a good bit of stability to most businesses. Landlords and home owners could relax and tenants could safely search for 12 month rentals with confidence.

Of course no action can occur in isolation and the military coup in Thailand is no exception. Any expat will already know that despite shortcomings of the domestic politics in Thailand, the SE Asian region is still on course to enter in to the AEC (ASEAN Economic Community) and many small and big businesses are preparing for this regardless of the political situation. Therefore residential and commercial real estate still is being built in central and urban areas of Bangkok at a quick pace.

One set of projects that illustrate this well are the fast paced developments of the EMQuartier, EMSphere and refurbishment of the Emporium all located in central Sukhumvit near Phrom Phong BTS.

Not content with having one large (by Western standards) luxury shopping plaza located near Phrom Phong BTS, the owners of the existing Emporium have decided to build not one, but two more huge luxury shopping plazas next to the existing Emporium. And if that was no enough, they have decided to also renovate the Emporium plaza almost fully, including the alteration of the sky-bridge to the BTS Phrom Phong station.

If any visiting or residing Westerner ever wanted confirmation of what those who run big business in Thailand think of the new regime, then this is it. Surely if there was a sense of fear or worry that the current regime may have a negative impact on the Thai economy then real estate projects like this massive amount of new retail space would be halted or at least slowed down - neither has occurred. 

This in addition to the dozens of huge condo developments that have opened their doors or still under construction illustrate perfectly that the people that control the economy and are highly well-connected clearly trust that Thailand is headed in the right direction, despite whatever a UK newspaper or US TV station may report.


Neil McDonough is a Director of EasyHomes Property Services Co., Ltd. which specializes in renting and selling Bangkok residential and commercial property to expats. You can contact him directly with any questions or queries relating to Thai real estate




Comments

my opinion.... real estate development in general is gone over the top.
and it doesn't mean that your last four paragraphs are reassurance of future gains in real estate.
countries around the world have had similar experiences for local and foreigner investors and unfortunately many have lost money on the way.
the way I see it is simple... the average salaries people earn in this country don't justify the cost of buying real estate.

By leo, phuket (30th September 2014)

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