No significant impact of baht strength on real estate anticipated


The baht has strengthened significantly over the past recent weeks, reaching a level not seen since the Thai currency was floated in mid 1997 when the Asian financial crisis erupted.  While the stronger baht has pushed Thai property prices up in US dollar terms, there has been no sign of any major impact on real estate transactions in Thailand to-date, according to observations by real estate management services company Jones Lang LaSalle.

Suphin Mechuchep, Managing Director of Jones Lang LaSalle, commented, “As the baht currency is strengthening, a concern over the possible impact on real estate is growing, particularly in sectors that rely on demand from foreign buyers, such as Bangkok high-end condominiums and resort properties in key holiday destinations.  However, we have not seen any effect from the strong baht on Thai real estate so far.  In fact, we do not expect the present baht strength to have any significant impact on most property sectors across the country, unless the Thai currency strengthens at a much faster pace, which is unlikely to be the case according to economists.”

Baht strength has no impact on Thai and Asian buyers

“Most of the property sectors in Thailand rely mainly on domestic demand at present.  In addition, while demand of buyers from the Americas and the Eurozone has subsided significantly due to financial turbulences in the two regions, the majority of foreign demand for Thai real estate over the past recent years has been from Asian countries, most of which have also seen stronger local currencies against the US dollar or the Euro,” Suphin explained.

Based on the year-to-date enquiries Jones Lang LaSalle has received, interest of foreign buyers in Thai properties including condominiums in Bangkok and resort condominiums and villas in key holiday destinations has remained stable.  The firm has also received continued enquiries from overseas companies looking to acquire manufacturing/logistics facilities in Thailand.

“Despite the stronger currency, Thailand remains one of the cheapest real estate markets in Asia Pacific.  This is one of the key factors that have kept the country’s real estate markets competitive,” the Jones Lang LaSalle chief cited.

Thai individuals and corporates encouraged to buy overseas properties

In the present environment, Thai corporates and individuals may take advantage of the baht strength to acquire overseas properties.

“There are a number of investment opportunities available in the world’s well established real estate markets such as gateway cities in the US and London, from individual residential units through to residential investment blocs, commercial buildings and hotels.  With the baht strengthening and capital values of real estate assets in these markets remaining attractive, it may be a good time for ultra-high net worth Thai individuals and corporates to consider these investment opportunities and act quickly,” said Suphin.