Property Prices Unlikely To Drop After Thailand Coup
The declaration of a coup by Thai General Prayuth Chan-ocha, head of the Royal Thai Army, is expecting to bring much needed peace and order to the Kingdom. However, investors expecting to see property prices dropping are likely to be disappointed.
After the Army took over and the implementation of a National Peacekeeping Council by Prayuth, Real Estate experts and economists mainly agree that there will be no or little effect on the property market in the long-term.
Indeed Dr. Mark Mobius, Executive Chairman of Templeton Emerging Markets Group and a long-term investor in Thailand stocks, said to Bloomberg: “We view the current military coup as likely overall positive as it creates a more stable environment. The prognosis for Thailand is good given that direct foreign investors want stability in the country.”
Moreover, another reason to affirm prices are unlikely to drop consists in looking at Thailand past political events. In fact, it is definitely not the first coup the Kingdom is facing, and property prices have always been increasing regardless of the political situation. The Thai Condominium Index shown in the graph below proved how property prices have been going up despite of the country’s permanent instability.
The reason is simple, Thai buyers, who account for the vast majority of property buyers here, will keep purchasing as they are simply used to such military coups. Indeed there were no less than 12 coup since 1932 and therefore, Thai people are not affected at all in their decision making process.
Foreign investors remain the most affected by these recent events given that they only follow the news through their home countries’ media, which may not entirely reflect what is truly happening in the Kingdom. However, the calm shall return soon and the investors with it.