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What effect will political unrest in Thailand have on the property market?

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By - Thursday 29 April 2010

The property market in Thailand has been experiencing an upsurge in interest over the past few years, with low prices, a relatively stable economy and a number of governmental policies tempting overseas buyers to the Asian destination.

However, media reports of growing political unrest in the in the country could have a profound effect on the destination as an investment hotspot.

The ongoing problem centres around a series of peaceful and violent protests in the country's capital, Bangkok, with demonstrators demanding an early election is called due to the illegitimacy of the current political regime.

Travellers have already been warned to give the country a wide berth and only make essential visits there. The British Foreign Office has claimed that the advice reflects the "increasing tension" in the area amid fears that violent incidents could occur nationwide.

What effect is this likely to have on the property market?

As with any country, political unrest is likely to have a knock-on effect on consumer confidence and a drop in interest is to be expected for a short period of time.

However, some investors, who remain confident that there will be a satisfactory resolution to the crisis in sight, may view the situation as an opportunity to buy, as earlier this year, the Knight Frank Wealth Report highlighted Thailand as one of the "go to" destinations for savvy investors.

This is not the first time that Thailand has experienced a political crisis and, according to Global Property Guide, back in 2007 the country witnessed a similar drop in confidence from investors. The destination - which had been experiencing an 8.03 per cent rise in prices - saw values plummet by 5.09 per cent year-on-year during the first quarter.

But Robert Collins, of Savills Thailand, is confident that, as before, the long-term outlook for the Thai property market remains positive, despite the reluctance of investors to purchase in the short term.

Judging on past results, Thailand should be able to emerge from this latest crisis in its political history with its housing market bruised, but relatively unscathed. In addition, the fact that the country remains a popular tourist destination should help to accelerate this return of buyer interest.ADNFCR-3415-ID-19748076-ADNFCR

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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.

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