Bangkok's property market to gain from the AEC

BANGKOK - Jan. 24, 2014 - PRLog -- At the end of 2015, just two years away, the Asean Economic Community (AEC) will become a reality, which will see the heralding in of sweeping changes for the region as a whole. The effect on Bangkok's property market looks set to flourish when taking into account all of the factors economic integration and the expansion of its underground train network will bring.

It would seem an inauspicious time to be writing about the property market in Bangkok when the street protests are at full tilt a week away from the election date over Thailand's big political dispute. When considering its under-pressure caretaker government you could be forgiven for think anything other than the country's economic conditions do not look particularly rosy.

However, the problems that are weighing down the country by the crisis have to be resolved sooner rather than later as businesses in and around the protest sites are struggling at best. And we should not forget that the changes that will be taking place with the onset of the AEC are two years down the line.

Thailand is Southeast Asia's second biggest economy and is set to become an even greater operational hub for Asian businesses in the region. It therefore makes sense to assume that investing in the Bangkok's property market, even if it is seen over the long term, is a wise decision. One of the reasons for this is that there is a growing awareness that Thai business owners are preparing for SE Asian integration in the knowledge that the city will financially benefit from regional integration.

Despite the political turbulence of past couple of months, international brands have been proactive in extending and opening up retail outlets in shopping malls across the central areas of Bangkok as it is expected that the city will become a magnet for regional shopping. For those of us that live here we have been witnessing these large-scale developments to accommodate the notion of more high-end products being available to Bangkok's growing middle class.

One of the many misconceptions about the bloc is its free mobility of labour. In fact, this will only apply to very small class of jobseekers, such as the medical profession, accountants, lawyers, engineers, architects and workers in natural resources. What this in effect means is that job losses will not appear as keenly as many people think and the city will not become flooded by a stream of migrant workers from poorer neighbouring countries.

The only aspect that could dampen Thailand's competitiveness in the new order is its lack of proficiency of English, which will be the group's lingua franca. But the Ministry of Education has spent a lot of money in trying to improve this among Thai students as they see them as becoming tomorrow's senior managers, especially in the SMEs, and Thailand can only strive to improve on its English skills in the meantime.

Another encouraging fact is a report that was published by the OECD Development Centre that estimated that, economically, Southeast Asia, China and India will experience strong growth over the medium term and achieve growth rates of 6.9% between now and 2018.

Also, with Bangkok's rail infrastructure being extended and many new mass-transit underground lines under construction, this will translate into a lot more residential units being built around the city as commuters move away from their cars and the gridlock of the city's major arteries. New stock is being scheduled for completion by the time the AEC comes into effect.

This can only be good news for the Bangkok's property sector as the benefits of economies of scale, reduction in transportation costs, a greater pool of skilled labour and its rail infrastructure look almost certain to reap rewards in the real estate market, especially with domestic investment in commercial properties by the building of more retail malls.

Rent Bangkok Apartments are well aware of these developments and have been bringing more properties on to our books that are further out of central Bangkok. You can browse or search through our listings on our real estate website at http://www.rentbangkokapartments.com. If you are interested in knowing more about the stock we have in hand, please do not hesitate to contact us.