The world continues to navigate the recent economic downturn, traditional investment routes have become less stable with lower returns. Seek out other opportunities for protecting assets and getting the most from their money.
Banks and other financial institutions have long been the go-to establishments for those looking to secure their money and investments. However, as the world continues to navigate the recent economic downturn, traditional investment routes have become less stable with lower returns. This has led people to seek out other opportunities for protecting their assets and ensuring they are getting the most from their money.
One sector that has demonstrated sustained long-term growth opportunities and guaranteed returns is real estate. So, how can investing in property in Thailand give you more for your money?
Thai Banks Have Limited Guarantees
From 11 August 2019 to 10 August 2021, Thailand’s Deposit Protection Agency Act protects Thai Baht deposits up to a maximum of 5 million Baht per depositor per financial institution. However, from 11 August 2021 onward, the Deposit Protection Agency will lower the deposit coverage limit to just 1 million Baht.
This means that if a bank or financial institution closes, you are eligible to receive up to the guaranteed amount within the stipulated reimbursement period. While this measure is in place to protect those who deposit their money in banks, this decrease in the protected deposit limit could potentially lead to a major losses for anyone with more than 1 million Baht in a particular institution.
And with the volatility of today’s market, this lack of guaranteed security is something to consider when investing your money.
Real estate on the other hand offers capital gains and guarantees on your investment, whether you are moving into a new property or investing for the future, as the value of land and development projects continue to grow.
Property Values in Bangkok Continue to Rise
Property values in Bangkok continue to grow as improved infrastructure and a rising middle class are leading to more retail, residential and commercial developments. One such example is taking place in one of Bangkok’s most desirable areas to live, Chidlom – Langsuan.
Since 2008, properties in this central part of the city have earned up to 6% in capital gains, which is exponentially higher than any return from a savings account at the bank. The value of land alone in Chidlom – Langsuan has increased 105% in the last five years, and is forecasted to see continued growth as a number of new projects are already in development.
Here’s a closer look at three major properties in the area and how their value has grown:
• 28 Chidlom: In 2015, the land for this project was purchased at 475,000 Baht/sqm
• SCOPE Langsuan: In 2017, the land purchased for this project was 775,000 Baht/sqm
• Sansiri PLC: In 2020, land was purchased for an upcoming property project at 975,000/sqm, which is the most expensive plot of land in Thai real estate history
As developers continue to buy the remaining land in this area, only some of which is dedicated to residential projects, the number of properties in Chidlom – Langsuan is also limited – making it even more valuable and desirable for living or investing.
In addition to earning 6% (and potentially more!) in capital gains on your investment, an added benefit of real estate investment comes in the form of Ready-To-Move-In properties.
The Added Value of Ready-To-Move-In Properties
With new luxury projects slated to break ground in the near future, there is clear investment value in ready-to-move-in properties. For one, these projects are up to 62.8% less expensive than yet-to-be-built projects, with the average condominium’s price per square meter ranging from 167,000 – 370,000 Baht. Due to the rising cost of land, new projects in the area are averaging 420,000 Baht/sqm.
Another benefit of ready-to-move-in properties is that they give you the opportunity to see what you are paying for. The units are built, the facilities are completed and the grounds are landscaped, so there is no question as to whether or not the property will look exactly like the model unit or project renderings.
This also means you do not have to wait to move in or start renting out your unit – and in turn will have more opportunity to start making those guaranteed capital gains on your investment.
For more information on the Chidlom area and how to get more from your money through real estate investment, please reach out to us at email@example.com or call +66 99 419 6364
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