Purchasing property is a whole new ball game when you compare the commitment involved to that of renting a property. Still, there are many foreigners that take the jump into the Thai property market. However, there are plenty of foreigners out there that would rather not take the risk with the current state of political affairs in the country.
The Thai political system has not helped with stability in the country’s economic arena. Many foreigners are put off by Thailand’s continuous dissatisfaction with each and every prime minister that steps through the door. Despite all the government woes, the baht still continues to hold its value since its recent appreciation against world currencies.
With a rising baht, any property investment is not only gaining on property increases in the country, but also on a global scale as Thai exchange rates remain favourable. Nevertheless, many foreigners are not impressed. If the government can’t get its ship in order, then it’s only a matter of time before the economy suffers. With this in mind many are of the opinion that investment in Thailand as a whole is not a safe option.
One of the biggest challenges for Thailand is competition coming from more peaceful countries politically speaking. That could mean Thailand loses out on future markets, while in the meantime its neighbours boom. The risk of a flattened Thai economy as well as the potential opportunity of alternative investment for would-be property owners are enough to dissuade them from making a commitment to any property investment in Thailand. While they wait for a sign of what is to come, they prefer to rent.
If Thailand does eventually fall behind neighbouring countries, an ensuing devalued baht will render any foreign investor’s property value worthless on the world property market. At the same time, demand for property in Thailand could fall as ex-pats flock to the thriving economies of neighbouring countries. The end result would mean decreasing value on domestic property prices due to demand leaving the country in favour of neighbouring countries.
Should speculation becoming reality, the Thai government may shape up and respond to this disaster by finally pulling together as a team. With Thailand’s strong geographical position in Asia, a well thought out strategic recovery should see a quick salvation of the lost economy. Such a recovery should re-establish demand for property in the country creating higher property prices. For those that get in during a crash, the returns during a recovery are potentially astronomical.
Right now there are a number of foreigners choosing to rent as a safer option while they wait for one of two things to happen in Thailand. Firstly, if prices do fall due to economic and political instability, then foreigners can buy at the bottom rate prices they have been waiting for. They can then wait for an economic recovery and gain a hefty return on their investment.
On the other hand, an economical and total political meltdown may never happen. There is always the chance the Thai government may finally get its act together before disaster hits. If this happens, then the rising baht coupled with a peaceful coherent government will set the path for a strong future. This will create a reliable property market worth investing in for the future, and so many more foreigners will swap their rental contracts for property ownership
