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Thailand Housing Industry Ready To Climb With Economy

bangkok-1124634_640The best time to get in on an investment is not only when the price is low but also before everyone else jumps on it. Although the economy is not booming right now, it also is not receding. The housing sector tends to be the last to react to major shifts in other industries.

Economic muscle

Recently, the Thai government began working with China not only to gain better military hardware but also advanced military training and technology. Although the feds will not allow foreign military bases, they are willing to engage in joint exercises and share landing strips. The administration is focusing on moves that will be most beneficial to Thailand’s security and future.

International infrastructure projects such as a railway system stretching across the Land of Smiles that will connect with China provide benefit without Thailand shouldering the full financial burden. The railway system not only will improve local business operations, it also will encourage more foreign investment and tourism.

Meanwhile, Thailand exercised its economic influence by reducing exports of rubber to raise the price of the commodity on the world market. The feds also agreed to pay local growers more than the market price. China is the southeastern regions biggest consumer of rubber.

Business growth

International corporations lately have increased their interest in Thai business sectors. Uber, the ride-sharing company, is testing a motorcycle service in Bangkok, Liam Cochrane of ABC Australia reports. The company sees an opportunity to grab customers who do not want to wait for a taxi. The motorcycle service also is less expensive. The Uber system eliminates the need to haggle because the prices are set on the mobile app.

Japan’s top four automakers recently confirmed their commitment to continue manufacturing vehicles in Thailand. The size of the production facilities in the kingdom are second only to those in Japan. The feds have waived import duties on prototype vehicles. By encouraging more investment by the automakers, the administration hopes more technology and knowledge will transfer to Thailand.

Recently, Lazada, the top ecommerce website in the southeast, announced Thailand will be a hub of product development and marketing, Suchit Leesa-Nguansuk of the Bangkok Post reported. The country’s ecommerce market could grow 30 to 40 percent, this year. Lazada has grown from a company of 20 employees in 2012, to a firm of 800, now.

Overall, the Bank of Thailand is confident the country is in a strong economic position. Foreign debt is low, and as an oil importer, the country is benefiting from the recent decrease in prices. Although gross domestic product is not expected to increase greatly this year, which also means the central bank probably will not raise interest rates. For homebuyers, that is good news because mortgage loan rates will remain low, this year.

Marketing timing

Conventional advice for the stocks and bonds is to avoid trying to time the market because it moves too quickly and can affected by a myriad of uncontrollable factors. Thankfully, the real estate sector reacts very slowly to external influences.

To see the state of the market is in a particular neighborhood and to find a house for sale, investors can visit DDProperty, an online real estate listing site. On the website, visitors can compare property prices and see how long specific units have been on the market.

As a buyer, it often is advantageous to target estates that have been on a shelf for a while because the owners likely have decreased prices and are more willing to make a deal, so they can move on to other things.

With the county expecting to see significant growth business because of foreign interest and infrastructure improvements, it is likely housing prices will increase in the next few years. As the land houses occupy becomes more valuable simply because of proximity to new jobs and transportation hubs, owners should see an increase in the equity of their investment.

Smart homebuyers will choose homesteads that are in locations set to enjoy prosperity in the near future. It does not make sense to purchase in an expensive neighborhood because prices in that area are less probable to rise. It also is not cost-effective to select the best house on a street with moderately priced homes.

Those wishing to make money through resale or equity would be wise find mid-level-priced homes in locations ripe for growth. In this way, buyers will not be overpaying and will not have to gut a dilapidated building.

House flipping greatly relies on an upward market. Not only do prices need to rise, inventory needs to sell at a steady pace. Unless a buyer is a contractor, rehabbing a property could be so expensive and time-consuming that any profit from a sale would disappear.

For most buyers, it is best to view the investment as a home. This perspective gives the homeowner more time to improve the property and react to the market.

Plan for success

Buying a home can be complicated. It’s not like clicking a button to buy a stock on a purchasing website.  A 30-year mortgage loan is a big commitment. To get out of it, the borrower must either sell his property at a price that will cover the remaining loan balance or refinance.

The advantages of refinancing can be the option to cash out equity or to gain a lower interest rate. Other financial options to homeowners involve home equity loans and lines of credit. These options depend on the current market value of the estate. To take advantage of equity, the owner must apply to his lender. The lender will order an appraisal of the unit to determine its present value. The more equity available, the bigger the mortgage loan or line or credit can be.

If the home loses equity because of a down market then the lender can freeze the line of credit, and the balance will be due. To finance improvement projects, it may be better for a borrower to use a credit card to pay for them. The interest rate often is lower that of a HELOC, and there is less risk of the freezing. The taxes advantages of paying HELOC interest are about as negligible as those of mortgage loan interest.

Another advantage to long-term ownership is occupants gain the quality of life benefits additions and upgrades provide. Instead of putting on a new roof and selling the house in hopes the upgrade will pay for itself, long-term residents gain the value of use for many years.

It normally is unrealistic to expect short-term price gains from expensive upgrades. On the buyer’s side, a new kitchen or roof usually is only a minor incentive to choose one property over another. In most cases, the location of the land makes up most of the value appraisal for the property.

Those wishing to jump into real estate ownership definitely can benefit from Thailand’s current economic and business situation. Interest rates and prices are low. If the available indicators are correct, urban property will increase in value during the coming years.

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