Political Impasse Casts Shadows on Thailand’s Property Landscape, While Investors Yearn for New Policy Measures

• 10 August 2023
• International News
• 1400 Views

Thailand’s property market finds itself at a crossroads as the nation grapples with a political impasse, leaving its real estate sector in a state of cautious anticipation. With an eye on the new government, industry stakeholders are yearning for policy measures to stimulate the market, particularly in the wake of the previous government’s fee reductions for mortgage registration and ownership transfers – measures that are set to expire by the close of 2025.

Amidst this uncertainty, analysts are spotlighting the potential impact of the political stalemate on the property market, as this year could see the launch of some 50,000 flats, amplifying the need for clear direction to maintain investor confidence, according to the  South China Morning Post on 6 August.

Wittaya Dave Apirakviriya, General Manager of ThinkOfLiving.com and DDproperty, a unit of prop-tech titan PropertyGuru, underscores the market’s current disposition: “The market is currently slow but quite stable in terms of supply and demand as local buyers are now adopting a more wait-and-see attitude, rather than making a decision. This is due to the current political situation as we are still in the process of forming a new government.”

The intricate political dynamics, characterized by Pita Limjaroenrat’s efforts to establish a new government and a backdrop of constitutional challenges, have led to a state of limbo that’s causing potential homebuyers to exercise caution. Peerapong Jaroon-ek, Founder and CEO of Origin Property, emphasized the industry’s yearning for further relaxation of foreign property ownership regulations, especially for landed homes, with a suggested cap of 20% outside Bangkok or for opulent beachfront villas catering to international buyers.

The property market’s resilience, however, is evident as Thai developers remain steadfast in their plans to launch around 50,000 flats and 35,000 landed units this year, along with approximately 1,200 luxury and super luxury homes. Artitaya Kasemlawan, Head of Residential Sales Project at CBRE Thailand, echoed the sentiment, projecting that while the political uncertainty may yield short-term effects on sentiment, the market’s foundation remains robust.

With real estate contributing around 10% of Thailand’s GDP in 2022, the nation’s property sector retains a pivotal role in its economic landscape. While the current political crossroads cast an ephemeral shadow, industry leaders and analysts are resolute in their belief that the enduring appeal of Thailand’s real estate will outlast the transient political flux.

• Analysis