The year 2014 has been a wild ride for all stakeholders in the Thailand real estate market. Through the course of this year, the market was at the brink of collapse after political instability escalated culminating in a military coup. Nevertheless, the property market proved more resilient than most people thought and was able to make a rebound and experience growth over the rest of year.
Below is a more comprehensive review of the Thailand real estate market in 2014.
The Year Started Well
For the four quarters ending in the first quarter of 2014, the country experienced a 5.71% increase in the prices of single detached houses. On the other hand, the price of condos, which are more popular among both for the locals and foreigners, grew by 3.76% over the same period. Then the political environment deteriorated over the second quarter of 2014.
The market slowed down due to political crisis
Deep political divisions between opposing political camps affected the Thai economy, and by extension, the real estate market. Luckily, both have an intriguing ability to weather serious political storms. The political crisis slowed down growth in the property market, as real estate developers became reluctant to proceed with their planned property development projects. Some of the developers considered less risky alternatives by initiating projects away from regions most affected by the unrests.
Locations popular among foreigners hard hit by political upheaval
Property markets most affected by the political tensions and the introduction of martial law included Chiang Mai and Pattaya, especially due to decline in foreign investor demand. Pattaya experienced a 60% decline in new condo units for the year ending September 2014. Chiang Mai experienced a 40% decrease in new condo units over the same period.
Martial law is still widely considered a deterrent for accelerated property investment, particularly among foreign investors. This is why areas where foreign real estate investments are common were worst hit by the coup and the current martial law.
Some property locations doing quite well
In Bangkok, popular real estate locations such as Thonglor experienced growth in property demand, especially for condominiums. Many areas within the city that have been traditionally popular destinations for those seeking real estate are filling up.
This has made locales such as Thonglor the new in-thing in the property market since such areas offer just as good access to reliable transportation systems as well as space for additional property development. On another note, commercial real estate in Thailand picked up strongly after the crisis came to an end with a military coup.
It would be fair to say that 2014 has been an exciting year for the Thailand real estate market. The market began the year quite well as evidenced by its ability to sustain its high year-on-year growth despite the start of a political crisis towards the end of 2013. As the crisis continued into the second quarter, property investors became more cautious and slowed down their property investment projects.
Foreign investors were the most cautious, and the real estate markets they dominate suffered considerably. However, as the year progressed, the market showed signs of recovery, particularly with regard to commercial real estate.
Meanwhile, some property locations are showing signs of becoming future property hotspots as demand for property in such areas increases.