August 4th, 2010
Thailand’s economy has been experiencing a sustained recovery despite the political turmoil and its effects on the always important Tourism industry. Rising exports to China and other East Asian Countries has driven a more than acceptable growth rate boosting the confidence of investors and puting the housing market under pressure.
Strong demand for residential properties
Thailand’s residential property market has been fuelled by the growing demand of an expanding middle class along with injections of cheap credit from the financial institutions. Furthermore the recently expired tax incentives helped boost demand and sales pushing prices even higher. Building industry has experienced a sustained expansion with price increases of 8-10% a year
Market outlook
As many are wondering whether the present house market uptrend is sustainable or not, others contend that the country is heading to a boom and overheated market. The Bank of Thailand Deputy governor warned not to be complacent about the chances of being in the middle of a property market bubble. In which case the chances of a bubble burst would increase if the global economic uncertainty could affect Thailand exports. When global economy is at risk property market bubbles are at risk too. Authorities are starting to worry about banks granting too much lending to housing loan clients as well as assessing the chances of having trouble paying their debts.
Thai Baht Exchange Rate
hotels in phuket thailand
This all sounds familiar. “Authorities are starting to worry about banks granting too much lending to housing loan clients as well as assessing the chances of having trouble paying their debts”.
Expansion of middle class along with injections of cheap credit from the financial institutions is a key to economic recovery for Thailand as well as other ASEAN countries. Nice post!
Thailand is fast becoming as an economic powerhouse in Southeast Asia. Jay has a point in saying that the rise of middle class will spur economic growth.