The Property market in Thailand and particularly in Real Estate in Bangkok does not react the same way as it does in Western country, such as the US & UK. Prices do not rise as fast in general and on the flip side, they also rarely collapse (exceptions to this have been the early 1990’s and of course 1997) when prices did alter considerably. However the pattern is a lot more stable than it is in the UK and US and a lot of that is due to the fact of the different fundamentals of the Bangkok Real Estate market, and the key factors are:

1. In the West we generally borrow most of the money to buy properties from the bank
2. In Thailand owners and investors in Thai property are generally cash-rich, they don’t need to borrow most of the money from the bank, and have often bought the property with 100% cash.
3. In the West we understand market movements, we understand that property prices rise and fall, and therefore the property market is full of a lot more speculators than in Thailand.
4. Thai Real Estate investors are in it for the long-term. With Thai Baht difficult to move out of Thailand and the SET in its infancy and unstable, then there are few options for Thai investors to broaden their portfolio. Bangkok Real Estate therefore becomes a very popular choice.
5. Thai property investors on Bangkok or elsewhere are in it for the long-term. They know the market will rise as land in key locations becomes scarce and therefore are happy to invest in Bangkok condos and townhouses that may just increase 5% p.a. on average over a 10 year period or more.

So in answer to the question of how the Bangkok property market is coping in this climate, then we have to look at the mentality of the Bangkok property owners and investors. They are not looking necessarily of a short-term gain, and so they are not fazed by a few problems in the near future. So when the Red-shirts encamped in the Rajaprasong area there was no knee jerk reaction. There was no mass fire-sale or drop in prices, and even the Bangkok rental market has remained pretty stable.

The owners have sat tight, knowing that the market, and the political situation will eventually right itself. The current political situation has been dragging on for a number of years, even before the political coup in September 2006, there had been murmurings of discontent from various factions. But against this back drop Thai people continued to invest in Thai property and in some years between 2006 ~ 2009, the Bangkok property market saw double digit gains.

With this memories in mind, most investors and owners I have spoken to in the last few weeks, have been speaking with relative confidence about the market. There is very little of the fear and anxiety that the Western media would like to depict in Bangkok.

For those looking to rent in Bangkok, there is some good news though, and it is not really due to the political crisis in Thailand, but more to do with the recent increase in supply of condos in Bangkok.

As anyone who has been living in Bangkok in the last 3-5 years will tell you, and anyone who has followed the Bangkok real estate market developments, there has been an increase in condos, apartments, townhouses and service apartments along side the BTS & MRT lines. This has meant that supply has recently been greater than demand. And whilst most Thai condo owners and apartment owners in Thailand have been sticking to their guns and not reducing prices too much, so of the smarter Bangkok landlords and landlady’s have been taking advice from Bangkok property agents and have reduced their prices to suit market demand.

We have seen prices for condos in Thonglor, apartments in Phrom Phong, townhouses Sukhumvit and properties in Sathorn all reacting to the change in the market fundamentals. With reductions of between 10-15% we can hardly call this a fire-sale and any sort of panic reaction, but it is better news for those looking to rent in Bangkok, and is a trend that looks like it will last a lot longer than the redshirts in Rajaprasong district.

So should you be scared about renting in Bangkok at this time? Well the simple answer is no! As a foreigner the redshirts are not interested in us, in fact they want our approval, they certainly don’t want to upset us. And this is the same of any of the other factions, they want the outside world to recognize and sympathize with them, so it is not in their interests to involve foreigners in any negative way.

What the future holds for Thailand on a broader political scale is difficult to say and I ma far from a political expert or analyst, but as for how it effects the Bangkok Real Estate will be more up to the attitude of the landlords and investors of property in Bangkok and Thailand. The Thailand real estate market, is here for the long term, it is recognized by many Thai’s as a great way to take advantage of capital growth. And as long as it remains difficult to invest outside if Thailand for the average Thai person, then the Thailand Real Estate Market and in particular the Bangkok property market, will remain attractive and therefore buoyant.

If you are a foreigner looking to invest in the Bangkok property market, this may be a good time to do it, as prices are perhaps currently relatively stagnant, but don’t expect any fire-sales or the bottom falling out of the market, as Thai property investors are not in short-supply and in the long-run they know the Bangkok Real Estate market is cheap compared to close neighbors like Hong-Kong and Singapore.

They also know political crisis are part of the make-up of Thailand and will come and go as they always have.