Bangkok--26 Jun--AREA
Sopon Pornchokchai, PhD CRS D.FIABCI MRICS
Regarding the opinion of professional property valuers in ASEAN, the economy and property markets in this region were assessed and the level of credibility of real estate professionals was compared with other professions in the society. What will happen in the real estate markets and professions after the institution of the AEC in 2015? Let’s explore this latest survey.
Dr.SoponPornchokchai, President of the Thai Appraisal Foundation, went to the 17th Congress of the ASEAN Valuers Association (AVA) held from July 2 to 5, 2012 in Brunei. He conducted a survey of ASEAN valuers on the future of the countries in ASEAN, as well as the valuation profession compared with others, together with an outlook on the future of the ASEAN Economic Community (AEC).
There were 200 participants at this AVA Congress. Members of all of the ASEAN countries, except Myanmar, were present and responded to the questionnaire. There were also participants from other countries, such as Australia, China, Hong Kong, and the UAE.
Considering the economic situation of countries compared to 2010 or two years ago, 56% assessed that it was better. Only 7% said that it was worsening. The rest (36%) saw no change. In detail, most valuers from Brunei, Singapore, and Thailand saw no change; whereas, the rest saw some significant, positive changes. However, regarding the economy in the next two years (2014), most (67%) said that it would be better. Only 4% said that it was worsening. Most of the Thai valuers assessed that the situation could be the same as today.
In the case of property markets, 63% assessed that the situation was better than that in 2010. However, only half of the valuers in Thailand and Brunei assessed the situation in this way. This might be due to the past political turmoil in Thailand or the economic stagnation in Brunei. Concerning future prospects for 2014, most (66%) believed that they would be better. Only 8% said the contrary. In the case of Thailand, it was considered that the 2014 property markets would still be the same as today. Perhaps Thai valuers were not so confident about the future prospects of the economy or the property markets.
The valuers were asked to assess the professional credibility of different professions, with the assumption that the credibility of medical doctors was 100%. On the whole, engineers earned a credibility score of 80%, followed by valuers (77%) and lawyers (75%). Brokers earned the lowest score of 68%. That the brokers earned the lowest score might be due to the fact that there was still no legal control for this profession.
Considering the AEC, 62% perceived that the AEC would have a positive effect on their own countries. However, for the countries outside the ASEAN region, this would not have much effect. Among the ASEAN countries, Thailand and Vietnam seemed to be worried about the AEC. Perhaps competition might be worrying them.
Vietnam seemed to be most ready for the AEC in 2015, where the level of readiness assessed by valuers was 86%. The second was Malaysia at 72%, and the third was Thailand at 67%, followed by Indonesia (63%). Brunei and the Philippines earned 58% and 57%. The lowest score was Cambodia (48%). There was no assessment for Singapore because of the few numbers of respondents in this case.
It is expected that in terms of real estate development, Thailand will be among the largest markets. According to the Agency for Real Estate Affairs, which is Thailand’s first and largest real estate information and valuation centre, the annual development value of real estate is around US$ 10 billion. Therefore, investors from other countries may like to come to this attractive market. Although the Jakarta and Manila markets are smaller to that of Bangkok, they both will have strong attraction for investors. The fast-growing economy and strong political stability of Indonesia and the Philippines are among the major drives behind the promising property markets.
It is expected that big developers from Singapore, Malaysia, and Thailand will develop cross-border real estate projects. Major developments would be low-rise housing projects as well as owner-occupied apartment (condominium) projects in major cities, such as Bangkok, Jakarta, Manila, and Ho Chi Minh City.
In the case of surveyors, valuers or appraisers, and brokers, major firms in Singapore and Malaysia should move ahead to other countries. However, there are already transnational property consultant firms with branches in different countries. Local consultant firms should ban together therefore as a strategic alliance to work in the borderless community of the AEC in the future.
In sum, the economy and property markets in this region have developed over time. If medical doctors are assessed at 100% credibility, valuers across ASEAN assessed their own profession at 77% after engineers (80%), but better than lawyers and brokers, who earned 75% and 68%. After the 2015 AEC, Bangkok, Jakarta, and Manila could attract a lot of cross-border investment from neighboring countries because of the size and the good prospect of the market. Expectedly, local property consultants will pull together for strategic alliances with services that can better cater to customers.