Despite the junta's 'colored' figures on the economy, according to an expert, Thailand is heading for a real estate bubble. This is because domestic private investment is too low. Most of them are concentrated in the real estate sector, which could eventually cause the bubble, said former World Trade Organization director-general Supachai Panitchpakdi.
He notes that the business sector in Thailand hardly invests, the profit is mainly paid out as a dividend to the shareholders. Companies in Thailand pay the highest dividends of any country in Asia.
According to figures from the Stock Exchange of Thailand, 567 listed companies made a combined net profit of 909 billion baht last year, 30 percent more than in 2015 and a record profit in the past five years.
High dividend payments from Thai companies have propelled the stock market, but that's short-term gain. Companies should invest more in research and development to also secure profitability in the future.
Supachai urges the government to come up with 'real' economic figures. Now the figures and the explanation about them are often colored for fear that negative news will lead to even lower investments: “It is better that we tell the truth.” As an example, he cites investment applications to the Board of Investment, which according to the government are increasing by 70 to 80 percent every year: “But where are the real investments?”
Source: Bangkok Post
And investment from abroad, traditionally an important engine in the Thai economy, is also lagging behind.
2013 $16.6 billion
2014 $3,5 billion
2015 $10.3 billion
2016 $5 billion
How could that be?
Tell me….
Do understand why the companies invest in real estate because the prices of houses around the Sukhumvit in Bangkok are skyrocketing. Probably also in other municipalities... Count from your profit.
Some critical economists call “shareholder capitalism” one of the biggest brakes on growth. In addition, today the CEOs are usually also shareholders, even rewarded with shares. It is not the long-term strategy that comes first, but the short-term interests of the shareholders.
Nothing wrong. Thailand will continue to grow. Factories can barely keep up with demand. The real estate market is booming. The Baht is very strong… which is proof of the rock-solid economy. Government investment is thriving. The middle class is getting richer by the day.
Are you making that up or do you have a serious source so we can read this?
Economic growth in Q1 fastest since 2012:
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http://www.tradingeconomics.com/thailand/gdp-growth
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The average income has increased over the past 10 years from 8000 Baht per month to almost 14000 Baht per month.
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http://www.tradingeconomics.com/thailand/wages
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The number of tourists breaks all records.
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http://www.tradingeconomics.com/thailand/tourist-arrivals
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And foreign investment is also on the rise again.
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http://www.tradingeconomics.com/thailand/foreign-direct-investment
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What we should definitely keep in mind with all these statistics is that they are figures from the Thai government and Bank of Thailand. And we all know that governments don't feel like publishing bad figures…certainly not in Asia where big brother China sets a good example with figures that cannot be reconciled with what is published by independent agencies such as Markit.
E.g. Thailand's unemployment statistics state that there are less than 500.000 unemployed in Thailand….anyone who believes this?
According to the World Bank, Thailand had an average annual growth rate of 2005% from 2015 to 3,5, so rounded off to 35 percent for convenience. Then a 35 percent increase in income from 8000 = plus 2800 is a total of 10.800. The 14000 of Tradingeconomics is based on salaries, so of only a limited group of earners in paid employment, not of the entire population or working population.
Another analysis that contradicts Fransamsterdam's thesis. The growth in the 1st quarter of 2017 is the largest since 2012, he writes. However, we are talking about a growth of 3,3 percent on an annual basis. Average growth from 2005 to 2015 was 3,5 percent, so an average of 10 percent over a 3,5-year period. The growth in the 1st quarter of 2017 does not indicate a clear improvement for the full year, but a slightly increasing growth in the 1st quarter. The expectation for 2017 is still around 3,5 percent.
Exploding the real estate bubble is not a matter of IF but of WHEN. Anyone who reads the newspapers and does not have their eyes in their pocket sees the enormous vacancy in new construction projects. Both in the houses in Moobans that are springing up everywhere. as in the condos. The Hig Rises look beautiful from the outside, but the vast majority of the condos are just walls, that is, a shell, nothing else. They wait with the finishing until they have a buyer. My well-maintained, with top security, High Rise has a vacancy rate of 45%, there are about ten shell 100M2 apartments here that no one has entered since 1996.
The fact that the Central group has canceled its Wetsgate project with 5000 homes is also indicative. Commercial land in Bangkok commands insanely high prices. Which drives up the land price of that land and at that exorbitant price people then take out new mortgages to purchase other land at exorbitant prices on which they then take out mortgages. The trees really don't grow into the sky. They blow so much air into the balloon that it has to explode.
If you know that the Chirativat family, owner of the Central group, with a fortune of US$13 billion, is the 3rd richest family in Thailand. But their assets mainly consist of real estate, so you know enough. Because they are currently paying more than outrageous prices for commercial real estate in Bangkok.
Idd, with us (BKK-Klongh Samwa) it is / was rumored that before 2020 the skytrain would come here with a line. As a result, land prices double from one day to the next from 10 million to 20 million baht.
Not that more is sold by it, all is still broken. I think the owners are so rich that they don't even want to sell and therefore ask impossible prices.