WHAT TO EXPECT AFTER THAILAND GENERAL ELECTION: OPENING THE WINDOW FOR BEST DEALS
Thailand’s long-awaited general election has finally come to an end with the ballot on Sunday, March 24, 2019. Despite the political parties’ winners and losers. There are expectations that the real estate industry keeps its smooth path without being hurt by the outcome of the polls, nor by the coalition that will form the new government.
No matter how the parliament will be formed, the main concern for the real estate industry is political stability and an environment of peace. Without demonstrations and riots on the streets, this will greatly contribute to businesses and the country’s economic growth. No doubt, a sustainable property market in the capital will ensure the industry keeps its growing pace.
Window of Opportunities
The general election and the following months can be seen as a clearer window of opportunities to invest a freeholder property in Thailand. After this period, the economy will strengthen, which warrants the appreciation of any real estate property.
It was in a time of uncertainty, or when the economy went into a crisis, that the best opportunities knocked on the door.
A simple, yet a true explanation is given: an issue won’t last forever. This comes to effect especially in Bangkok, which was under political unrest in 2013-14.
This state of affairs didn’t stop the city to attract business. To the point that property investment from foreigner investors under joint ventures with local developers rose from 50 billion baht in 2015 to 110 billion baht during 2016-18. Japan and China were the biggest investors, followed by Singapore and Hong Kong.
Real Estate Well Balanced
Potential foreign investors who seek to be freeholders in Thailand may rest secure. In fact, this year’s forecast for a slowdown of the country’s economy and the property market came to benefit the latter industry for several reasons. Firstly, the forecast gave the real estate sector an opportunity to take proper measures in order to readjust beforehand.
And then, because uncertainty would be predictable after the ballot. Real estate companies must have found ways to look into wider directions towards profitability. In this sense, there’s no need to wait for the next government to take charge and implement new policies or incentives. Finally, the forecast came at the best time for the property market to be well balanced and help to stabilize the country’s economy.
The new loan-to-value (LTV) ratio regulation, to take effect on April 1, 2019, is a challenge for condominium developers regarding second-home and subsequent home buyers. Since the domestic demand is growing slower than supply, this will play in favor of foreign buyers. They usually take no loans, which means the new regulation will have no effect on them.
Up to now, special discount packages have been announced by major developers prior to the new LTV coming into effect. Such regulation will ensure better property market adjustment and more reasonable prices.
Excellent freehold units can easily be found across Bangkok’s Central Business District (CBD) – Early Sukhumvit, Wireless / Ploenchit, and Silom / Sathorn. Also in Rama 9, which is Bangkok’s new CBD, where a good stock is still available. Or in the west bank of Chao Phraya River (Thonburi side). Those are deals to pay off in 3-4 years in terms of residential units’ valuation.
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