This week, the “Bangkok Shutdown” was the talk of the town. The massive anti-government movement has remained fairly violence-free, and it has been effective in disrupting business activities in key city areas. On Monday, the first day of the shutdown, attendance in the central business district plunged as much as 80 percent, according to some reports. The Thai Chamber of Commerce estimates the economic loss at about THB 700 million each day.
As reported by The Nation, the Bank of Thailand is concerned that prolonged political unrest will adversely affect small and medium-sized enterprises (SMEs) in Bangkok, with the service sector taking the biggest hit. These businesses are highly dependent on the purchasing power of the people, which is diminished by the political uncertainty. Currently, SME operators have expressed that the situation is still manageable and commercial banks are supporting them through loan extension and the lowering of interest rates.
The general sentiment for the Thai property market in 2014 is cautious optimism, hinging on how quickly and smoothly the current political turmoil can be resolved. At the moment, many property developers, owners, investors and occupiers have adopted a wait-and-see approach, watching the situation closely before making any transactions or deals.
Knight Frank Chartered (Thailand) Co., Ltd. has reported that the condominium market in Bangkok and popular resort areas, such as Hua Hin, is feeling the impact of the protests in the capital, with potential buyers sitting on the fence, waiting for the political situation to ease. The Hua Hin condo market, which consists principally of Thai buyers, is especially stagnant, as it was already suffering from the effects of over-supply.
In Pattaya, it was business as usual at the inaugural launch of the Pattaya Property Show. Held at the Hilton Pattaya over three days, from 9 to 12 January, the sell-out event was well received by exhibitors and attendees. The show featured over 45 exhibitors, including large developers Kingdom Properties and Raimon Land, in addition to local players such as Nova Group, Blue Sky Group and The Riviera Group. Sales of homes and condos were brisk, with buyers and attendees hailing from over 20 different countries.
Further South, the mid-level segment of the Phuket condominium market, with units priced around 5 to 10 million baht, continues to attract buyers, according to Knight Frank Thailand. This market consists of (mostly foreign) buyers who desire a holiday home as a personal winter retreat and rent-generating investment property during the rest of the year.
On a broader scale, Property Report surmises that the Phuket property market has shifted directions, with its traditional market moving to less dense and more exclusive beach areas, such as Koh Lanta, Krabi and southern Phang Nga. Listed Thai developer Charn Issara has announced a new project in the latter area, riding on the success of its Sri Panwa estate in Phuket. The viability of these new projects depends largely on infrastructure developments; a bridge under construction in Koh Lanta that spans at least one island, for example, will herald a rise in development activity.