What's On Thailand - Positive prospects in Samui's property

Positive Prospects in Samui’s Property

COMPARED with some other sectors of the economy, the property market is not likely to lose steam in 2008 because of or in spite of the US subprime low-cost housing loan crisis. The real estate market in Thailand’s various regions continues to see growth despite further decline in other sectors in 2008, according to experts.

The political instability over the past two years following a military coup d’etat has dampened the interest of foreign investors in Thailand, but the economy has, nevertheless, managed to grow, though at an anemic rate compared with its neighbors. Growth is expected to be higher once an elected government is in place.

A stable political situation with the return of an elected government, plus a sustainable economic stimulus package, will certainly ensure the return of investors’ confidence.

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This anticipated political stability is expected to boost the property sector further. For the past couple of years, the Thai property sector has adapted well to market demands, and the international marketing of plush plots and projects has drawn significant interest, notwithstanding the effects of the US economic downturn, which threatens to escalate into a global recession. Thailand, together with other economies, nervously watches possible repercussions of the US economic slowdown.

Multinational real estate corporation CB Richard Ellis remains confident about the Thai resort property market, having expanded the Phuket office and opening offices in Koh Samui and Pattaya in 2007. Restrictions on foreign ownership are still challenging as almost all demand in resort locations is from foreigners.

CB Richard Ellis hopes that a newly elected government will look at increasing the foreign quota for condominiums, a 99-year lease and permitting foreign buyers to borrow money locally to fund property purchases.

Tourism, the country’s largest gross earner accounting for a tenth of the annual national revenue, plays a vital role in the property sector.

Resort-development projects like those on Samui have proven to be popular with foreign buyers including high-income-earning expatriates. The results are greater needs for long-term accommodation other than hotels.

Despite a more favorable outlook, the property sector has to become wary of both external and internal challenges that may weigh down Thailand’s economy in 2008 even after a newly elected government has been installed.

It is critical that the Thai economy build from internal strength through increased corporate efficiency, resiliency of households and improved overall competitiveness.

Strong policies and realistic implementation are also needed for the Thai economy to recover and for full investor confidence to be restored.

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