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Property Investment in Thailand

Thailand’s economy and burgeoning tourist industry are creating a myriad of opportunities for the property investor. Property investment in Thailand has shown impressive capital growth maintained over several years, with rental returns consistently high.

Tourism is critical to this multi-sector growth, a trend apparent in many successful emerging real estate zones. The number of tourists visiting Thailand has almost doubled over the last decade. According to the Governor of the Tourism Authority of Thailand (TAT), “We are projecting 15.7 million visitor arrivals in 2008, up 6% over the projection for 2007, with tourism revenue projected at 10% growth from $16.5 billion in 2007”.

It is not only in tourism that Thailand is flourishing; the country’s economic fundamentals across the board are solid. Thailand’s economy registered an average 4.3% growth year-on-year during the first half of 2007, a slight moderation from 2006’s growth rate of 5%. The country’s exports have supported this growth, particularly in the sectors of agricultural products, electronics and manufactured goods. Inflation has been declining steadily from its peak in May 2006; the forecast average core inflation range for 2007 was narrowed to between 0.8% and 1.3%, following actual data up to Q3 2007, whilst the 2008 forecast has remained unchanged at between 1% and 2%. These forecasts fall well within the 0% to 3.5% target band of the Bank of Thailand.

“We are projecting 15.7 million visitor arrivals in 2008, up 6% over the projection for 2007, with tourism revenue projected at 10% growth from $16.5 billion in 2007”

Thailand’s property investment potential looks strong. Cost is an important underlying factor with property in Thailand costing as little as one-third that of other major tourist hotspots. Add to this Thailand’s democracy, its reputation for warm, friendly people, its low crime rate as well as a wide range of high-end leisure activities (such as water sports and golf) it’s easy to see why investors are increasingly looking at Thailand as an exciting property investment opportunity.
The country’s climate and geographical location means that Thailand can maximise its potential for year-round residential tourism. Charlotte Filleul of CB Richard Ellis has highlighted how the advantageous climate attracts retirees from
Europe; Thailand’s rainy season being in European summer time means they are able to make the best of both climates.

Thailand is building on its solid reputation as a desirable tourist destination. Its sound economy, stable political environment, stunning natural features and competitive prices have ensured its place on the real estate investment radar. It offers extremely attractive investment opportunities for a broad range of investors over a variety of property investment choices.