There have been many floods in Thailand this year. In February 2011 Krabi hit the news with very large volumes of rainfall creating mudslides and of course, the current North Thailand and Bangkok floods are still daily world news. With any disaster on this sort of scale, it is bound to have repercussions. Some Bangkok residents will want to relocate and one of the places they will look at is Krabi.
So what effect will this have on the real estate market in Thailand?
Although it’s still a little early to truly reflect on the latest flooding, one thing that we can be sure of is that this is not going to be the last. Thailand being a tropical country in the monsoon belt has always been subject to very high seasonal rainfall and whether the current extremes are a result of climate warming or just a recurring historical event is a matter for debate. What is not a matter for debate is that these events should be learnt from and planned for. Much of the actual damage in Bangkok and in fact throughout Thailand has been the result of what can only be called bad planning. Unconstrained housing development has meant that common sense has been thrown out of the window so just perhaps, the silver lining to all the current troubles is that being fresh in the mind of the public will mean that demand for developments that actually do follow regulations will increase and those created by developers who have brushed rules aside will dwindle.
Krabi, being a relatively new area for property development, has the benefit of hindsight. The local authorities have learned from the experiences of Phuket and Samui and are actually making impressive headway in designing the infrastructure for the future. Roads, electricity and water supplies and development are on the whole being well planned and constructed and planning regulations are being enforced. As long as the authorities stay on this line with the development, then Krabi for sure will enjoy a very bright future.
Many development companies are also learning from past mistakes and are realising the marketing potential of incorporating their own additional strategies into their developments. Water management, including drainage and local water supply, are high on the list but also, energy management including solar supply and good design to reduce energy consumption are becoming major selling features as potential customers begin to put more importance on both energy costs and also, very importantly, on environmental considerations.
Local development companies are also being encouraged to be proactive in the development of Krabi as a whole and the way it relates to the unique geography of Krabi. Views are being guarded to prevent the loss of the beauty which is really its main attraction as a tourist destination.
One effect of the flooding on real estate demand in Thailand as a whole is that of the demand for condominiums rather than individual houses. This makes sense as not only are you assured of safety from flooding, but also they are a more efficient use of resources, have better security, can generally be more cost effective in prime locations and make ideal rental opportunities. It makes sense to me that this trend will follow throughout Thailand rather than just being a feature of the Bangkok real estate market.
In the future, prime real estate locations in Krabi are going to become ever more difficult to find and secure. The one thing we do have to be careful about is to ensure that condominium developments don’t come at the cost of Krabi’s attractiveness to tourists. The tourism market is the main driving force behind the growth but tourists are fickle and tourist destinations are fragile and easily spoiled.
Krabi has a very bright future, it’s natural beauty, unique geography and modern infrastructure mean that it will grow. Krabi developers and the customers who will create the growth must learn from the lessons that nature is sending. The flooding in the North of Thailand are a timely lesson and should be learnt from. The next few months and how Thailand recovers from the floods in Bangkok and the North of Thailand will certainly have an effect on the number of visitors and the way in which this rebuild is managed will affect the number of those visitors who are willing to invest.