Market Growth In Thailand

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.

Capital Growth Predictions

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.

Rental Yield Predictions

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).

Reasons Why Thailand is an Intelligent Property Investment Location

  • An exotic long haul destination, Thailand is also a sophisticated tourist destination with a great universal appeal
  • For thousands of people who have worked in Asia for many years, Thailand is a very attractive retirement destination, in which the living environment will feel familiar
  • Retirement visas are available for foreigners over 50 years of age, according to financial means
  • Thailand has good schools, an efficient health care system and it is seen as a friendly country in which to live or visit
  • Thailand boasts beautiful mountains, dense forests and stunning beaches
  • With a tropical climate and cities teeming with culture and colour, Thailand entices visitors back each year
  • Warm weather for winter holidaymakers between November and February
  • The relatively undiscovered nature of Thailand means that property prices here remain far below those in the more established European markets, although they are growing at a higher rate than in other Asian destinations
  • Thailand is the largest growth market in Asia. Many businesses choose Thailand as a regional base from which to keep their employees working all around Asia
  • Thailand has recently attracted significant foreign investment. It has become one of the Asian economic leaders and is one of the fastest-growing economies in the region
  • The completion of the Suvarnabhumi-Bangkok International Airport (SBIA) has precipitated growth in commercial property markets in eastern Bangkok as well as make Thailand even more accessible by air
  • Thailand is one of the cheapest places to fly to in Asia
  • The country has strong business links with China and has an excellent infrastructure as well as world-class facilities in many resort towns
  • Property is much cheaper in Thailand than elsewhere and an increase in overseas interest in property purchase has helped to create an economic recovery in Thailand.
  • Rental potential is strong, due to increased government spending luring growing numbers of tourists and investors alike
  • No capital gains tax for private investors, and low ongoing taxes
  • Today foreigners are regarded by the government as a big investment opportunity in Thailand. The current waving of Stamp Duty and Transfer Tax are all good news to investors.

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