If you have ever thought about investing in Asia, or investing in property or Real Estate then these articles will help guide you through the process. With Europe struggling to recover from the financial crisis, Asia is comparatively steaming ahead! Investing in Asia therefore makes sense. And investing in real estate and property is one of the most solid ways to do this.
Investing in Thailand property therefore makes sense. And there is no better place and faster growing place than Bangkok, the best place in Thailand to invest in Real Estate. With world populations set to rise from 7 Billion to 9 Billion in the next 20 years and urbanization set to increase from 50% to 80% in the same time period, and most of this happening in Asia – the world’s most populous continent – then it is clear the demand for property in cities like Bangkok will increase dramatically! And investing in well located Bangkok Real Estate will therefore be wise move.
Investing in a buy-to-let property in Bangkok or property you want to live in your self will experience capital gains of approximately 4-5% annually over a 10 year period. In 2003 the average price for a luxury, Grade A property in Sukhumvit road was just THB 60 000/ sqm (US$ 2 000/sqm) now in 2012, less than 10 years later, the average price for the same properties is THB 120 000/ sqm (US$ 4 000/ sqm), a 100% increase in less than a decade! These figures alone demonstrate the value of investing in Bangkok real estate.
However there are other advantages to investing in Bangkok real estate, one of those being the rental returns. Back in 2003 it was easy to get rental returns of 10-11% even on brand new properties, however due to the expansion of the supply of condos in Bangkok and the rapid rise in property prices, returns are more like 5-6% in today’s market for brand new properties bought at today’s prices, however this still easily trumps comparative rentals in other major capitals of the world, such as London, Sydney, New York, Paris etc, which see 2-3% returns on newly bought properties.
Of course there are potential Bangkok property investors that point that investing in Bangkok is a risky business with the recent political instability, but the fact is even with the coup of 2006 and the Red and Yellow shirt demonstrations, there ha has been little change in the 1979 Thailand Condominium Act that allows foreigners to own a finite number of condominium units in Thailand 100% outright and in freehold format. The most recent amendment to this law which occurred in 2008 even increased the protection of the buyer, and therefore made a foreign investment in a condominium in Thailand even less risky. It is no surprise then that 17% of condominiums in Bangkok are owned by foreign property investors.
The other negative comment that is often made in regards to investing in Bangkok real estate is the recent increase in supply of condos on the market. Yes there has been a recent increase in the number of properties launched on the market, but many of these developments have been sold out quite quickly to both foreign and local investors.
The advent of the Bangkok metro system BTS and later MRT has dramatically changed the landscape and now skyline of Bangkok. The MRT & BTS has anchored the city to the train lines and therefore most new Bangkok condominiums, apartments and townhouses have been built close to the new BTS and MRT stations. There has of course been the obvious and unavoidable lag as local Thai people and foreign expats have adjusted to the new transport system, but now we are in the full swing of the ‘sky train generation’.
If you http://www.easyhomes.tv/bts-search search along the BTS and MRT lines it will be clear that most new developments have sprung up within a 500m – 1km radius of a BTS or MRT station, with some developments only a 50 – 100m walk from a station and a select few even linked to a station. It therefore goes without saying that these are the easiest and fastest properties to rent out or sell and it is only really the mispricing of a minority of individual landlords above market prices that lead to any delay in finding a tenant of buyer.
In the next part we will focus on the real estate investment potential of various locations in Bangkok and the returns that can be expected from example buildings and why one location or indeed building may be superior to another.