The information below highlights the economic structure of Thailand today and outlines why Thailand’s investment potential it is turning the heads of many investors.
With the aid of a thriving tourist industry, property in Thailand is experiencing a quiet revival despite the temporary effects of today’s political and world economic unrest. New construction in resorts areas is still expected to attract vast tourist numbers for short term holidays, while generating strong rental yields for the investors who own these properties.
In order to meet the target of 10% annual growth in tourist numbers, the government is concentrating its marketing efforts on high-end international tourists with strong purchasing power, especially those from the European Union, the United States, Japan and China.
Focus is on areas such as Koh Samui where land prices have seen the most significant increases. Other projects in the resorts of Hua Hin and Lanta Island are also attracting substantial interest and it is important to search for property in popular areas in order to benefit from maximum investment growth.
About 33% of the Thai population is aged between 25-44 years, which is a very good demographic figure for the growth of the domestic housing market, especially in the middle-end investment sector.
It is undeniable that the “Credit Crunch” has damaged property values in Thailand, as in other worldwide destinations. Many Asian economies have seen enormous growth and are expected to experience a correspondingly dramatic fall in their economies, with property developers being hard hit. However, Thailand’s slower growth in the property sector, accompanied by its continued appeal as a top holiday destination are now allowing it to weather the current financial storm better than many. Property in Thailand, particularly in off-plan developments, remains a relatively stable longer term investment opportunity.
It is expected that the coming year may bring higher rents, particularly in Thailand’s retail and residential sectors.
The best investment returns are to be found in apartments in the major cities which rent out to the domestic market and which have been enjoying increased rental rates, while holiday apartments in popular resorts also still experience high rental demand. Many property developers are planning new projects in the Sukumvit area of Bangkok, where demand is dominated by expatriates.
If you select a property in a suitable location, it is expected that mortgage payments and bills can be partly or totally covered for the year from the rental income achieved from the peak season months alone (November to February).
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