The economic crisis has shaken the West’s confidence and the fact that the economies of China and India are growing by 10% and 9% respectively, compared with 3% for America and 2% for Europe, goes somewhere to demonstrate that shift happens.
At the end of last year, The Economist published an article “Now hope is on the move”, saying that in a recent poll “some 87% of Chinese, 50% of Brazilians and 45% of Indians think their country is going in the right direction, whereas 31% of Britons, 30% of Americans and 26% of the French do. Companies, meanwhile, are investing in ’emerging markets’ and sidelining the developed world. ‘Go east, young man’ looks set to become the rallying cry of the 21st century.”
It was suggested by CBRE that faster resurgence than in 1997 crisis is expected this year because of “rapid global action and good local financial health” and predicted back then that “Thailand’s property market is expected to recover” in 2011″.
According to Aliwassa Pathnadabutr, managing director of CB Richard Ellis (Thailand):
“We believe that this recovery cycle will be faster than that after the 1997 financial crisis because global leaders such as the US, the UK, Europe, Japan and China have launched measures to solve the problem. Meanwhile, Thailand’s property developers and finance firms are healthier, financially, than they were in 1997.”
There are always some that advocate the resurgence of the property market this year but caution needs to be added into the mix: the global property bust that led the world into recession did start to lift in 2010, with property prices up in Britain and stabilised in America.
By late 2010 output and employment was up in most “mature” economies but Europe has been humbled by its sovereign-debt crisis, which is undermining the euro.
So we can’t be altogether sanguine about the recovery in property markets this year as some might have us believe. One of the major problems facing Bangkok is the continuing political uncertainty and the oversupply of rentable space relative to demand.
Surprisingly, though, Thailand Property Market concludes that Thailand’s economic fundamentals are strong as the country “continues to be an attractive place to do business” with the baht and the stock market at an all-time high.
Jones Lang LaSalle concludes in its report that this year is expected to see a much greater divergence in real estate activity and performance: global direct commercial real estate investment volumes rising by 25-35% on 2010 levels.
Asia Pacific will lead the upswing in leasing markets, ahead of Europe and North America; prime property will continue to outperform secondary; and that the domestic corporate sector will come to the fore in Asia Pacific, particularly in India and China.
They also predict that “robust competition for trophy assets in the world’s high order business hubs will continue to push up capital values, with London, Paris and Moscow offices expected to achieve double-digit prime capital appreciation in 2011”, while in the major Asia Pacific cities,
“prices may be forced up beyond usual risk return capitalisation rates, particularly when compared to levels that can be achieved in more mature markets such as London.”
Looking at the year ahead, we feel that in attractive investment opportunities to take advantage of selective value-add and opportunistic strategies there is every reason for optimism in US real estate markets for 2011 in spite of the fact that quantitative easing and pressure on expanding government budget deficits.
This couldl see the economic growth trajectory and outlook to be one of maintaining parity with caution and opportunity. It is also likely that Thailand will continue moving forward with the ’emerging markets’ of China and India likely to expand. This could lead to their investing in attractive markets such as Thailand.
# # #
Soho Properties is a leading property agent in condos for rent in Bangkok, and offer a first-class service for all property-related needs.
China’s new three-child policy highlights risks of aging across emerging Asia
Thailand’s (Baa1 stable) total dependency ratio is set to jump nine percentage points to 51% by 2030 – a faster increase than China’s – which will pressure public and private savings through higher taxes and social spending, reducing innovation and productivity gains.
Population aging in China (A1 stable) and other emerging markets in Asia will hurt economic growth, competitiveness and fiscal revenue, unless productivity gains accelerate, according to a new report by Moody’s Investors Service.(more…)
Clear skies over Asia’s new foreign investment landscape?
Compounding the fallout of the US–China trade war, the global pandemic and recession have caused considerable speculation on the future of foreign investment and global value chains (GVCs). But though there is likely to be some permanent change, it will probably not be as great as politicians expect.(more…)
Can border reopening revive tourism in South-East Asia?
In Thailand, where pre-pandemic tourism accounted for 11-12% of GDP, the country lost an estimated $50bn last year as Covid-19...
Thailand dropped from UK’s tough covid-19 travel ‘red list’
Earlier, Thailand was listed among countries with high infection levels that were put on a ‘red list’, requiring arrivals to...
The ASEAN-Russia Trade and Investment Cooperation Work Program
ASEAN and Russia recently agreed to enhance and widen economic cooperation at the 10th ASEAN Economic Ministers (AEM)-Russia Consultations held...
Flexible Workspace Startup Worklounge Debuts with 20+ Luxury Member Lounges in Thailand
Worklounge launches a premium membership granting remote professionals and executives access to exclusive hotel lounges across Thailand. Their platform is...
5 insights to guide ASEAN’s digital generation in a post-pandemic world
We surveyed 86,000 people from six ASEAN countries about their views for a post-pandemic world. The ASEAN Digital Generation Report...