THAILAND HAS A STRONG, STABLE AND DIVERSIFIED ECONOMY
GDP by country - World -2015
| Rank |
Country |
USD Bin |
| 1
2
3
4
5
6
7
8
9
10
11
...
16
27
34
37
39
47
70
95
25
|
United States
China
Japan
Germany
United Kingdom
France
India
Italy
Brazil
Canada
Korea
...
Indonesia
Thailand
Malaysia
Singapore
Philippines
Vietnam
Myanmar
Bahrain
South Africa
|
17,947
10,866
4,123
3,356
2,849
2,422
2,074
1,815
1,774
1,551
1,378
...
862
395
296
293
292
194
65
32
597
|
Source: World Bank, World Development Index Database
Ease of Doing Business (World ranking - Asia focus)
| Rank |
Country |
| 1
3
5
18
26
29
53
78
90
95
114
135
142
148
177
|
Singapore
Hong Kong
South Korea
Malaysia
Thailand
Japan
Bahrain
Vietnam
China
Philippines
Indonesia
Cambodia
India
Lao
Myanmar
|
Source: World Bank, Ease of Doing Business Index 2015
Corporate Governance
| Rank |
2007 |
Score |
2010 |
Score |
2014 |
Score |
| 1
2
3
4
5
6
7
8
9
10
11
|
Hong Kong
Singapore
India
Taiwan
Japan
Korea
Malaysia
Thailand
China
Philippines
Indonesia
|
67
65
56
54
52
49
49
47
45
41
37
|
Singapore
Hong Kong
Japan
Thailand
Taiwan
Malaysia
India
China
Korea
Indonesia
Philippines
|
67
65
57
55
55
52
48
49
45
40
37
|
Hong Kong
Singapore
Japan
Thailand
Malaysia
Taiwan
India
Korea
China
Philippines
Indonesia
|
65
64
60
58
58
56
54
49
45
40
39
|
Source: Asia Corporate Governance Association, September 2014
- Diversified economy (car industry, hardware, tourism, agriculture, food industry, telecommunications, tourism, etc.)
- GDP growth (5% average in the last 30 years) and inflation (3% average) are remarkably low for an emerging country
- 68 million inhabitants with strong middle-class of 12 million (similar to Malaysia) – Vs. 1.5 mln only in Indonesia and Vietnam
- High employment (officially 0% unemployment rate)
- Remarkable resilience to internal crises (political unrest, natural disasters, 17 coups since 1950)
- 3rd most promising emerging market in the world in 2013
http://www.bloomberg.com/news/photo-essays/2013-01-31/the-top-20-emerging-markets
- 26th country in the world for the ease of doing business (see table below) well ahead of all most Asian countries except Singapore, Malaysia and Hong Kong
- At the heart of the Asian Economic Community (AEC)
- Massive infrastructure development plans (Bangkok mass-transit system, high-speed trains in Thailand and with China, water management, express ways, Dawei’s port joint development with Myanmar, etc.)
- 800 Billion THB of foreign direct investments in 2015 (740 Bln in 2014), 25% from Japan
- Large hub for Japanese manufacturers (car industry, industrial equipment, electronic devices)
- Bangkok was the most visited city in the world in the first half of 2016 (Tourism represents circa 15% if the GDP)
- New hub for e-commerce, attractive environment for start-ups
- Attractive tax regime (low social contributions, low tax on capital gains, very low tax on property transactions, etc.)
- Moderate and tolerant social and religious environment (90% Buddhist)
- Neutral on geopolitical stage (often called “Switzerland of Asia”)
BANGKOK HAS AN AFFORDABLE AND DYNAMIC NEW SALE AND RESALE MARKET
Note: the market analysis below is focused on condominiums (the only property type accessible to non-Thai investors,
see our page HOW TO BUY PROPERTY IN THAILAND) in Central Bangkok
- Thais account for 80% of condominium owners in Central Bangkok
- Thais are mostly investing in new condominiums (off-plan buyers)
- Foreigners are more attracted to the resale market
- Sales prices are lower in Bangkok than in most large Asian cities (e.g.: 5 to 6 times lower than in Hong Kong and Singapore)
- Prices vary significantly (ratio of 1 to 8) between condominiums in the same area depending on:
- Age
- Grade (see table *Usual grade classification in Bangkok)
- Reputation of the developer
- Proximity to the public transports (BTS, MRT, etc.)
RANGES OF RESALE PRICES IN CENTRAL BANGKOK
| Property grade * |
Resale Prices in THB |
Luxury and Super-Luxury
Grade-A
Grade-B
Grade-C
|
250,000 – 400,000 / sq.m.
150,000 – 250,000 / sq.m.
100,000 – 150,000 / sq.m.
50,000 – 100,000 / sq.m.
|
* Usual classification in Bangkok
Luxury and Super-Luxury
Grade-A
Grade-B
Grade-C
|
Most exclusive properties, < 10 years since completion
High standards, < 10 years since completion
Good standards, > 10 years since completion
Mid-range properties, > 15 years since completion
|
Market data from Sense Property research center as of 01/02/2017
- We have noticed a significant price premium for new condominiums completed since 2012-2013, which
is not always justified by the quality of the construction (choice of materials, finishing, noise insulation,
etc.) and is in fact mainly due to the boom in land prices and the strong demand from wealthy Thai and
foreign buyers (mostly Asian) for new and luxurious-looking condominiums.
- The main trends in the condominium market are:
- - Drop in the average unit size (square meters)
- - Focus on small unit types =>70% of the total stock since 2012 are studios and 1-bedroom units
- - Shift to luxury projects
- - Renovations of older units
For more information consult our page RENOVATE YOUR PROPERTY
CONCLUSION
- The condo market (new sales and resale) has a promising future in the central areas of Bangkok, because of the limited supply and
the high demand from both Thai and foreign investors
- Resale prices are expected to rise in well-located, well-built and well-managed condominiums
- The significant gap in prices between old and new condominiums offers excellent opportunities for investors willing to invest in
renovation and home-staging
- The luxury market is a promising niche due to to lower prices much more attractive than in other large Asian cities
- There is a risk of oversupply of new high-rise condominiums in peripheral areas (we advise to stay away from this market)
5 RULES TO INVEST WISELY IN BANGKOK CONDO MARKET
1) Prime location
- Easy access to public transportation system (BTS, MRT…)
- Popular areas with expats
2) Well-built condominium
- Reputation and history of the developer
- Compare with residences of the same age
3) Good management and maintenance
- Study the financials of the condominium
- Asks details of past and future renovation projects
4) Good layout and specifications
- Always keep in mind your tenant will most likely be a foreigner
- Expats have different needs than Thais (large living area, storage space, balcony…)
5) High liquidity on rental and resale market (look for condominiums with low vacancy rate)
- The fewer units available for sale or for rent in the condo, the better
- Always ask how long the property has been on the market
For detailed information, go to our page CHECKLIST FOR BUYING A CONDO IN THAILAND
GOOD TO KNOW
The significant price premium for most new condominiums completed since 2012-2013 is not always justified by the quality of the construction.
Apart from high-quality luxury projects, older condominiums are often a smarter investment