Military move no surprise to property players; economic crisis the main concern
While the military coup is expected to be negative for the country’s investment sentiment, the impact on the real-estate industry has remained minimal, according to international property services firm Jones Lang LaSalle.
“Our discussions with clients and business partners, including property developers, investors and corporate occupiers, showed that the coup came as no surprise.
“Many of them had not expected negotiations between pro- and anti-government parties facilitated by the Army to settle the country’s political crisis,” managing director Suphin Mechuchep said yesterday.
Most property players have appeared immune to the political situation. They have experienced many disruptions in the past, such as coups, political violence and natural disasters.
Experience showed that most of these disruptions had either short-lived or limited direct impact on the real-estate industry.
In fact, economic crises were more harmful to real estate. Capital and rental values in some property sectors fell during the Asian financial crisis of 1997-98 and the global financial crisis of 2007-08.
However, over the past seven months of pre-coup anti-government protests, capital and rental values in most property sectors continued to grow.
The coup may scare off property investors who are new to Thailand, but regardless of the military intervention, new investors are less willing to enter the market here anyway, because of the political turmoil that the country has endured.
“Similarly, since the political tension escalated late last year, we have seen developers, owners, investors and occupiers becoming more cautious, with some of them adopting a wait-and-see approach.
There remains no clear evidence of the coup changing the situation at this stage,” Suphin said.
“Having said that, it remains too early to tell if the military intervention can provide a solution to the country’s political deadlock and help reduce political uncertainty, or will have a negative or positive impact on the overall economy and the real-estate sector in the later phase.
“It is expected that an interim government will be formed shortly. If the resistance is limited and the interim government is capable, we would then see some hope,” she