Baht not yet impacting Thai realty market
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Demand from Asian and local investors remains strong
Depending nearly entirely on domestic demand, the overall property market is witnessing no downsides from the recent appreciation of the baht, but ultra-luxury projects are noticing a change in buyer behaviour.
“Most of our customers speed up their decision to buy and need to pay now when they believe the baht will remain strong,” Sorapoj Techakraisri, chief executive officer of Pace Development Corporation, whose residences attract foreign-investor interest, said yesterday.
Suphin Mechuchep, managing director of Jones Lang LaSalle, a property agency, said that while demand from the Americas and the euro zone had subsided significantly due to financial turbulence, most offshore demand for Thai real estate over the past years has been from Asian countries, most of which have also seen stronger local currencies against the US dollar or the euro.
The stronger baht has pushed property prices up in dollar terms, but there has not yet been any sign of a retreat from the market.
“As the baht is strengthening, a concern over the possible impact on real estate is growing, particularly in sectors that rely on demand from foreign buyers such as Bangkok high-end condominiums and resort properties in key holiday destinations. However, we have not seen any effect from the strong baht on Thai real estate so far,” he said.
“In fact, we do not expect the present baht strength to have any significant impact on most property sectors across the country, unless the Thai currency gains at a much faster pace, which is unlikely, according to economists.”
Based on inquiries that Jones Lang LaSalle has received this year, the interest of foreign buyers in properties, including condos in Bangkok and resort condos and villas in key holiday destinations, has remained stable. The firm has also received continued inquiries from overseas companies looking to acquire manufacturing or logistics facilities here.
Among cheapest in Asia
“Despite the stronger currency, Thailand remains one of the cheapest real-estate markets in the Asia-Pacific region. This is one of the key factors that have kept the country’s real estate markets competitive,” Sorapoj said.
In the present environment, local corporations and individuals may take advantage of the baht’s greater value to acquire overseas properties.
“There are a number of investment opportunities available in the world’s well-established real-estate markets such as gateway cities in the US and London, from individual residential units through to residential investment blocks, commercial buildings and hotels.
“With the baht strengthening and the capital values of real-estate assets in these markets remaining attractive, it may be a good time for ultra-high-net-worth Thai individuals and corporations to consider these investment opportunities quickly.”
