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The recent events in Bangkok have raised concerns about whether the country could recover from the financial turmoil that this crisis has brought or not. The recent Stand-off in Bangkok shook the whole nation and it has somewhat affected the country's tourism industry.
Although it will still take several months before the effects of the turmoil on Bangkok’s economy will be noticed, a lot of financial experts there believed that such crisis won't affect the country’s sales and letting volumes, as well as prices and rents on Thailand's real estate properties.
The total overall supply of an expat standard apartment in Bangkok 's city proper are actually increasing to about 2.3% year after year and the occupancy rate was somewhere between 88.2%. Rents have been increasing on various locations all over Bangkok, including the Central Lumpini, although it fell on some other locations.
Despite the increase in the number of hotels all over Bangkok, the occupancy rates are still increasing, although the average daily rate has decreased on the first quarter. The arrival of international tourists has increased by about 27.1% on the first quarter of 2010, which obviously is an indication that the Tourism Industry is gradually increasing. However, on the second quarter, when the Bangkok stand-off happened, it is expected that the results will be very poor for this quarter and it is still unpredictable as to when this would last. Real estate developers in Bangkok are still puzzled as to when they could recover and that majority of those condominium units launched during the first quarter were mainly for one bedroom unit only.
Currently, the real estate markets remained weak and there was no indication of any increase in the supply. The retail occupancy rate has increased to 93.4%, while rents remained at that same level. Several shopping centers were closed down in Central Bangkok during the months of April and May. On the first quarter of 2010, several industrial parks and estates were sold, and this increased to 891% since last year. There was also an increase of 175% in Bangkok's townhouse completions on the first quarter, but developers have built single detached house and the completions fell down by 74% per quarter.
The existing supply of condominiums in downtown Bangkok reached to 67,176 units, from the 65,067 units during the first quarter of 2010. This shows an increase of 3.2% quarter after quarter, and a 15.8% increase year after year. There were around 2,109 units completed during this quarter and another 5,220 units are scheduled to be completed by the end of 2010 which will increase the total downtown condominium stock significantly to about 72,396 units or around 11.3% year after year.
On the lighter side, the property market in Thailand, particularly the real estate, did not actually react the same way it does with countries like US and UK, when these countries suffered economic downturn. Prices of real estate properties in Bangkok did not increase rapidly although on the flip side, it cannot be denied that they did collapse. However, the pattern is generally stable, as compared to when the US was hit by economic crisis. This is maybe due to the fact of the different fundamentals in Bangkok real estate market.
In answer to the question on how the Bangkok property market is coping up with all these turmoil, it is probably best to consider the mentality of Bangkok property owners and investors as well. These people were not necessarily looking at the short term gain, and so they are not at all affected with the tragedy in a major way. They remained positive and believe that these things will just come to pass. In fact, when the Red shirts encamped in the Rajaprasong area, there was really no major reaction from the people, and the economy itself. There were no mass drop in on the prices of goods and even the Bangkok rental market has remained stable.
For those looking for condominium properties to rent in Bangkok, there's good news to them. The cost of renting these properties are somewhat declining, but this is not mainly because of the political crisis though. This is due to the recent increase in the supply of condos in Bangkok.
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