Thailand unaffected by credit crunch

The credit crunch may be biting across the globe but according to property investment experts it is a good thing for Thailand. It isn't affecting people directly but an indirect effect is likely to be realistic valuations and therefore long term stability for investors.

This is good news for those interested in investing in the second largest economy in Southeast Asia. Also after 15 months of military rule, the new Thai government is actually laying out a number of incentives for investors.

'While the credit crunch may not be affecting Thailand directly in terms of its citizens being foreclosed upon, it is having a direct impact on the amount of money flowing into Thailand, according to a report from real estate agents CB Richard Ellis.

For example, Singapore and Hong Kong which were both significant investors in Thailand have sub-prime obligations, as does the US, another strong investor in the past.

But the report also points out that since 2003 there have been price increases of up to 12% in the luxury condominium market in Bangkok, and now that there is a shortage of property under construction and coming to completion, these price gains could not only continue, but potentially improve.

Generally the credit situation globally is regarded as having sobering effect on the Thai market which bodes well for its long term health. The Bank of Thailand has imposed such restrictions on lending that it's having a direct impact on property valuations and according to Scott Bolls from Smith Hodgkinson auctioneers, appraisers and valuers, this has brought realistic valuations to the Thai market which will protect it over the medium to long term.

There are a couple of other issues that would-be investors should be aware about in terms of property in Thailand – there's the fact that often projects are announced but never realised. Additionally there is the fact that there is a lack of liquidity across the country affecting everything from new project starts to consumer activity – this will have a real effect on the development of the property market and impact on an investor or at least their chosen strategy for profit.

BOOKMARK THIS PAGE (What is this?)