Foreign exchange and how it affects the Thai property market.
In resorts such as Pattaya, the foreign exchange rate is keenly watched by all. Not only does the level of the Baht dictate affordability of all services to overseas visitors but also, more crucially, it has a direct impact on the property market.
While a weak currency would appear to be the best scenario for the Thai property market, allowing foreigners to buy property cheap, it does not necessarily bode well from an investment perpective. In the first place, rental returns will be forthcoming in the local currancy and so the value of these returns will also be low in terms of the base currency used.
Furthermore a currency that is seen to be on a weakening trend can start to eat into potential property gains. Although property will become more and more enticing to overseas buyers, the fall in the value of the currency may be mean that gains are poor. Indeed if a trend is evident there is no incentive for buyers to rush in and buy if they can secure local funds at a cheaper exchange rate going forward.
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