The recent favourable conclusion of the UK election, namely the coalition between the Conservative and Liberal Democrat parties to form a stable government, will do much to restore confidence and almost certainly result in the rise once again of the pound sterling, as well as reassuring the EU financial markets. Recently, positive news that the US economy is showing improvements boosted the stock exchanges of SE Asia, including the beleaguered SET (Thai Stock Exchange). These developments must improve the financial situation of Western expats, both here and abroad, which of course will have a positive knock-on effect on the Pattaya Property Market that has once more been in the doldrums.

Another very favourable development is the fact that the Bangkok Property Market, particularly for condominiums, showed a phenomenal turn for the better in the last half of 2009. Off-plan sales, recently having lost their gilt-edged appeal, completely  rebounded, registering an astounding growth of 380% over the year, to the tune of Bt46 billion, though this was with well-established developers of high repute; newly established ones almost completely lost out to the ‘big boys’. Another very significant development was that the buyer profile also changed radically in favour of the domestic market in the ratio of over 92.2% Thais, and only 8.8% foreigners. Other significant statistics are that there were exceptional sales in new launches, some selling out in under a week, and of the 22 completed projects, 84% have also been sold to date, with a similar expectation for 2010.

Prices have also begun to rise significantly in Central Bangkok. According to market research from Binswanger Brooker (Thailand), the prices of prime plots in Ploenchit now exceed those of the halcyon days of 2008, with major developers such as Raimon Land, the Central Group and Sansiri investing in premier plots for future developments. The purchase of a 3,200 sq.m. plot on Wireless Road for Bt1.152 billion  by Sansiri, for example, represents a new record for Thai land prices. The main reasons for the price rises, according to Nigel Cornick, now CEO of Binswanger Brooker, is the short supply of freehold land and the attractions of Central Bangkok. This was amplified by the termination of the transfer fees, stamp duties and business tax exemptions. Cornick also pointed out that the political unrest doesn’t seem to have impacted the property market significantly (yet).

Although prices are rising here, Thailand still compares very favourably with its neighbours, standing  8th out of 11 at Bt79,840 psm, whereas the land prices in the top three, Hong Kong (Bt493,568), Japan (Bt442,048 ) and Singapore (Bt362,368), are much higher. Rental prices in Thailand also compare favourably with our neighbours, Thailand ranking 6th out of 12. The average rental here is Bt63,776 per month, compared with Bt251,328 in Japan and Bt153,856 in Hong Kong, the two highest, whereas, at the other end of the scale, Chinese rental averages are Bt32,192. Both of these favourable statistics reflect well on current property owners and prospective buyers in Thailand.

The implications of these developments for the Pattaya Property Market are also favourable, for one, the increased eagerness of the Thai-Bangkok populace to buy property, especially condominiums, means that they will almost be certain to invest in similar property here for 2nd and holiday homes; for another, as the major, listed developers begin to realise significant profits from the Bangkok market they are also likely to look favourably on the property sector here in terms of building new projects.

All our recent political troubles, which old Thailand hands, especially in the property  industry, dismiss as part of the ongoing scenario in the country and not one to essentially deflect serious investors intent on maximising their return on investments, may not impact as much as some fear. There are strong indications that the big foreign buyers and investors are out there, just waiting for a resolution to the current crisis, which looks likely to occur, not least because the Red-Shirts will soon lose a significant number of their agricultural supporters who must return upcountry to plant the next rice crop if they are not to lose their livelihoods. Let’s look on the bright side.