Thailand: Real Estate in the
Land of Smiles
By Paul Volodarsky, Limcharoen
Each year, millions of tourists come to Thailand
to enjoy the amazing food, sites, beaches
and people. The growth and maturity of
tourism has introduced a range of enticing
options, from beachfront resorts to secluded
mountainside villas. As with any real estate
investment, choosing the right opportunity
is about assessing the risks and weighing
them against the potential benefits. As they
make this determination, potential investors
should have an understanding of Thailand, the
land and its history, access rights and zoning
restrictions. Understanding and mitigating the
risks associated with a particular real estate
investment is best achieved through detailed
research and smart due diligence. In light of
recent events in Thailand, potential investors
should also understand how the country’s real
estate market is likely to be affected.
Current Events in Thailand
As readers may be aware, there have been
serious political disputes between the
two major political parties in Thailand that
recently ended with a coup d’état on 22 May
2014. These events have presented Thailand
in a somewhat negative light. Therefore, it
is important to consider how the political
situation is likely to affect potential real estate
investment. In order to better understand
how the real estate market affects foreign
investors, it is important to first understand
how tourism responds.
Official figures provided by the Bank of
Thailand show that up until this year, the
tourism industry has expanded rapidly, with
the number of annual visitors increasing from
10 million in 2003 to 26.5 million in 2013. But
it is important to note that there have been a
number of significant local and global events
that have affected tourism growth. In general,
recent historical trends have not significantly
deterred tourism. Even during times of
political uncertainty in Thailand, such as the 19
September 2006 coup, the number of tourists
continued to grow. Although Thailand is likely
to see fewer tourists in the first half of 2014, it
is likely that the tourism industry will continue
to grow as the new interim government
begins the process of reform and provides
much-needed stability.
Real Estate
Many foreign visitors fall in love with Thailand
and seek out ways to take advantage of all that
the country has to offer on a long-term basis.
This could mean purchasing a luxury villa for
private use, or for investment in the growing
tourism industry. As calm is restored after the
coup, investors may be wondering whether it
is a good idea to invest in Thailand. To better
understand the real estate market, it is useful
to review the connection between tourism
and real estate growth.
Using the quarterly reports on the value
of land and building transactions and the
number of tourists visiting Thailand as
published by the Bank of Thailand in May, it
becomes apparent that there is a connection
between recent real estate growth and the
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