Interview: Visit Malaisirirat
What is your outlook on the purchasing power gap between investors and prospective buyers?
VISIT MALAISIRIRAT: Thailand’s overall economic outlook is positive, and recent years have seen its political divisions calmed. Key indicators such as exports – which drove strong GDP growth in 2017 – give us grounds for optimism. Although we have found that the upper end of the market remains strong, the lower end continues to experience an oversupply. In our view, property developers need to base their strategy on serving existing demands and needs. Any discussion of buyers being locked out of the market must lead to understanding the reality of less affluent purchasers; this is not only a financial issue, but an ethical one. One of the most interesting and promising possibilities in making property attainable at the lower end of the sector is to consider designing residences and communities with built-in, income-generating opportunities.
What impact do you anticipate ASEAN Economic Community (AEC) integration to have?
VISIT: AEC integration is likely to enhance Bangkok’s already strong appeal to purchasers in the luxury segment. The city stands out within the region for its quality of life. As a real estate market, Bangkok offers the benefit of scale. The city has a long-established competitive market with plenty of options, including a wide selection of diverse neighbourhoods, each with its own character and attractions. Bangkok is also resilient, recovering quickly from economic challenges. Stronger economic and cultural links across ASEAN will only serve to encourage executives and professionals to relocate to Bangkok, which is an ideal base for operating across the emerging region, both in ease of access to transport connections and lifestyle. Overall, it provides the reassurance of a familiar brand, whose essential character rarely falters; it is less certain how other cities in the region will feel in 10 or 15 years’ time. Additionally, as a global city, Bangkok is an international property market which provides huge lifestyle advantages, most notably in the luxury segment, cushioning the market from local economic fluctuations. Bangkok holds another regional advantage in pricing; land still costs far less, for example, than in somewhere like Singapore or Hong Kong. Meanwhile, other regional cities like Kuala Lumpur, that may be ranked as somewhat more affordable, do not offer the same range of options or quality of life. In Thailand, the proposed changes to land and building taxes are aimed at encouraging the use of land nationwide, so their implementation should encourage those holding plots to sell land for real estate development. Within the high-end segment, however, the effect will be minimal. Good plots in attractive locations are now in very short supply, and their prices will continue to rise regardless of the policy change. We expect Bangkok to set a new record for prices in 2018, whether the proposed tax changes are implemented or not.
How do you see the Eastern Economic Corridor (EEC) project impacting the sector?
VISIT: The EEC aims to create and foster a global economic hub. This will be supported through a combination of public and private investment of around BT1.5trn ($43.4bn) in the project’s first five years.
The anchor of the EEC is the high-speed railway from Bangkok to Rayong, which will connect three of Thailand’s international airports – Don Mueang, Suvarnabhumi in Bangkok and U-Tapao in Rayong – within a one-hour train ride. It will also accommodate a projected 110m passengers annually.
Located in eastern Thailand and the heart of the AEC, economic access to almost half of the world’s population in China and India will become reachable through two- or three-hour connecting flights. Ultimately, we see the EEC as way to create employment opportunities, foster innovation, attract a skilled workforce and encourage sustainable urban development.
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