[BANGKOK] Thailand’s capital may have dodged large-scale damage from Friday’s (Mar 28) Myanmar earthquake, but the collapse of a 30-storey building under construction – killing at least 11 people – could shake confidence in the city’s disaster readiness and its already shaky property market.
No surprise then that Thailand’s regulators and key market players were quick to launch damage control efforts to calm nerves after the quake.
“The banking system didn’t go down, the insurance industry was ready to help the people and companies affected, industry kept producing goods and transportation survived,” said Asadej Kongsiri, president of the Stock Exchange of Thailand (SET) at a hastily called press briefing on Monday.
Thailand’s banking system also appears to have held steady through the quake, including Internet-sensitive services such as e-banking and mobile payments.
“This was a stress test that I’m glad we passed, whether it was Prompt Pay, mobile banking or Internet banking,” said Roong Poshyananda Mallikamas, deputy governor of the Bank of Thailand, who was also present at the briefing.
While most buildings held up, the quake is likely to jolt Bangkok’s already fragile real estate market – especially the condominium sector, which was struggling even before the tremors.
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“The majority of the buildings were elastic enough to absorb the shock,” said Thanes Weerasiri, president of the Council of Engineers Thailand (COET) at the briefing.
Weak domestic demand, a pessimistic economic outlook, and household debt hovering at 89 per cent of GDP had already weighed heavily on the market. The added fears around building safety and structural integrity may now deepen the slump, as potential buyers grow more cautious.
“Potential buyers may become more cautious, delaying or reconsidering their purchase decisions,” said Bualuang Securities, in an updated report on the post-quake property sector.
“And, concerns about building safety and structural integrity could lead to a decline in demand, particularly for older or less reputable developments,” it added.
The epicentre of the Mar 28 quake – measuring 7.7 in magnitude – was near the city of Mandalay in Myanmar, triggering the strongest tremors felt in Bangkok in 90 years.
By Thailand’s standards, the quake was relatively mild. The 2004 tsunami devastated the Andaman coast, killing thousands and dealing a blow to the tourism industry.
In 2011, widespread floods – partly blamed on poor water management – swamped much of Bangkok, shut down Don Mueang Airport, and crippled hundreds of factories in the central plains, disrupting global auto supply chains and prompting some manufacturers to adopt a Thailand-Plus-One strategy.
Thailand passed a law in 1997 that put in place strict building guidelines on safety measures against earthquakes. According to Thanes, only two Bangkok buildings are currently rated “red” by the COET, as in dangerous, although he stopped short of naming them.
The collapsed State Audit Building was under construction by a joint venture between the Italian-
Thai Development (one of Thailand’s well-established construction companies) and a subsidiary of the China Railway No 10 Engineering Group, according to the Bangkok Post.
Both companies are under a government-run investigation to determine the cause of the collapse.
A drop in property sales occurred after the 2011 floods, when demand for low-rise, flood-prone homes dried up, but buyers turned to condominiums instead.
The floods also put Thailand’s GDP into near zero-growth in 2011, but no such serious repercussions are expected from the earthquake, said Thai Finance Minister Pichai Chunhavajira.
Thailand’s GDP is expected to grow in the 2 to 3 per cent range this year.
The SET, which suspended trading on Friday following the quake, reopened on Monday, with the SET Index eventually closing down 1.5 per cent. The longer-term impact on equities remains uncertain.
Investors are closely watching property stocks, particularly firms heavily exposed to the struggling condominium sector.
Beyond the earthquake, the SET is grappling with broader headwinds – from rising geopolitical tensions and a sluggish domestic economy to persistent foreign investor outflows, which totalled US$10 billion between 2023 and 2024, according to CLSA.
Whether policymakers and market players can turn this near-miss into a wake-up call may well define Thailand’s investment story in the months ahead.
