A recent earthquake exposed safety concerns, adding pressure to an already fragile real estate sector
Despite avoiding widespread destruction from Friday’s (Mar 28) Myanmar earthquake, Bangkok’s real estate sector is facing fresh uncertainty after the collapse of a 30-storey building under construction, which claimed at least 11 lives. The incident has reignited concerns over the city’s disaster preparedness and the stability of its property market.
In response, Thai regulators and industry leaders moved quickly to reassure the public and investors. “The financial system remained intact, insurance firms were prepared to assist, industries continued operations, and transport systems held up,” said Asadej Kongsiri, president of the Stock Exchange of Thailand (SET), at a press conference on Monday.
Thailand’s banking sector also demonstrated resilience, with digital services such as e-banking and mobile payments functioning without disruption. “This was an important test, and we passed—whether it was Prompt Pay, mobile transactions, or online banking,” said Roong Poshyananda Mallikamas, deputy governor of the Bank of Thailand.
While most structures withstood the tremors, concerns over building safety are now adding pressure to Bangkok’s already struggling property market, particularly the condominium sector. “Many buildings were flexible enough to absorb the impact,” said Thanes Weerasiri, president of the Council of Engineers Thailand (COET).
Even before the quake, sluggish domestic demand, economic uncertainty, and high household debt—at 89 per cent of GDP—were dragging the real estate sector down. Now, potential buyers may hesitate even more. “Concerns about structural integrity could further dampen demand, especially for older or less reputable developments,” noted Bualuang Securities in a report assessing the post-earthquake property outlook.
Adding to economic worries, Thailand’s tourism sector may see a short-term dip, with the Thai Hotels Association warning that international arrivals could decline by 10-15 per cent in the coming weeks due to shaken traveller confidence.
Friday’s 7.7-magnitude earthquake, centred near Mandalay, Myanmar, caused the strongest tremors felt in Bangkok in nearly a century. While Thailand has enforced stricter building regulations since 1997, COET reports that only two Bangkok buildings are currently classified as high-risk—though their names remain undisclosed.
The collapsed State Audit Building, under construction by a joint venture between Italian-Thai Development and a subsidiary of China Railway No 10 Engineering Group, is now under government investigation.
Historical precedents suggest the quake’s economic impact will be limited. In 2011, devastating floods led to a decline in demand for flood-prone housing, pushing buyers towards condominiums instead. However, unlike those floods, which stalled GDP growth, Finance Minister Pichai Chunhavajira expects Thailand’s economy to expand by 2-3 per cent this year.
The Stock Exchange of Thailand, which halted trading on Friday, reopened on Monday with the SET Index closing down 1.5 per cent. Investors remain cautious, particularly regarding property stocks, as the market navigates broader challenges—including geopolitical tensions, a sluggish domestic economy, and ongoing foreign capital outflows amounting to US$10 billion between 2023 and 2024, according to CLSA.
Whether policymakers and industry leaders can turn this crisis into a wake-up call for better construction standards and market stability remains to be seen.
