Why it must be Thailand?
Thai economic growth
Thai National Economic and Social Development Board (NESDB) announced that stepping up pace of country’s GDP (gross domestic product) for 1-3, 2018 registered the quickest pace of expansion in five years. It was supported by strong private equipment investment and increasing employment due to increase of export, ensuing expansion of private consumption, and positive public investment by Thai government.
Thai government which aims for Detroit of Asia had been establishing large scale industrial parks in the province, invited Japanese automotive companies, lead to expansion of employment opportunities and increase of individual consumption. This national project lead continual economic growth and stable price increase; moreover it boosts demand of rental market of condominium as I wrote later.
On the other hand, positive public investment by government leads economic expansion at urban area. Infrastructure provision leads land development at surroundings. For example, after the extension of Sukhumvit line of elevated railway (BTS) from Onnut, construction of condominium and shopping male began along the railroad line. The area which was thought as local area are drastically changed, raise property price. For example, the price increase rate of condominium in 2014 is 35%, monthly rent is 15%.
Investment environment in Thailand is supported by strong demand and continuous public investment.
Thailand's GDP
Increase of Japanese expatriate
The target of rental market in Thailand is Japanese expatriate. Their budget is much higher than local employee because they are transferred by employer against their will. Average gross rate of return in Thailand is 4.5-5.5 %. It might not touch your hear so much. However, if you calculate amount of income, you might be impressed by it. Income-gain which occupies 50-70 % of investment return, to comparison with capital-gain, income-gain is predictable, high certainty income. In other word, income-gain reduces the risk of investment.
Japanese resident in Thailand
Potential of AFTA
Tariff elimination by ASEAN Free Trade Agreement (AFTA) started on 2010, completed on 2018. In accordance with this, the priority of Thailand which is located in the center of Mekong economy has been increasing as production base which provides industrial products to Vietnam, Cambodia, Myanmar, and Laos. As reflect it, the membership of Bangkok Japanese Chamber of Commerce and Industry rapidly increase since 2012, show us that the Japanese-affiliated company activate as if keep the step with AFTA. This matter is a seemingly unrelated to real estate investment. But increase of investment from industrially advanced nation stimulates the economy, raise price of condominium unit. Moreover the advance of Japanese –affiliated company means increase of Japanese expatriate, stimulate demand of rental market of condominium. In other word, AFTA could be positive factor for capital gain and income gain of real estate investment.
The membership of Bangkok Japanese Chamber of Commerce and Industry