How the Thai real estate market is developing: an overview of the dynamics
Consulting company CBRE has analyzed the real estate market in Thailand. According to its estimates, the positive dynamics of Q4 2022 continued in early 2023. The main factor for increased activity in the industry is the removal of restrictions related to COVID-19. During this period, the number of transactions in the residential real estate market grew, and the reorientation of several properties played an essential role in this. According to CBRE, about 95% of new condominium developments in Bangkok are targeted at buyers with small and medium budgets. Apartments in low-rise complexes were in demand among locals in early 2023. Therefore, we expect more such projects to appear, as the niche is quite popular.
When choosing a property in Thailand, buyers are guided by specific requirements and expect the developers’ proposals to meet them. Consumers pay particular attention to the availability of large spaces and the functionality of the apartment layout. In addition, they need to have green areas and privacy in living. Buyers are also interested in projects that use innovative technical solutions.
When considering the purchase of luxury housing in Thailand, consumers choose options that allow multiple family members to work remotely. Such accommodations must have enough space for all residents. In addition, buyers need to have on-site charging for electric cars and several parking spaces.
Traditionally, Thai real estate is very popular among foreigners. The total for the three quarters of 2022 was about 7 thousand transactions with this category of buyers. Most often, non-residents buy property in the country to make an income. However, not all housing brings a high rental income. It is important to consider the type of object and its location. Rental prices in Thailand increased in 2022: for houses and villas, it was 11%, and for townhouses – 8%. At the same time, rental rates for apartments decreased by 1%. The profitability of apartments in Bangkok varies from 3 to 8% depending on the location and conditions. In Phuket, renting apartments brings 12% per annum.
As for real estate prices, the upward trend that began in 2021 continues. There was a slowdown in the 4th quarter of 2022, but in 2023 the rise in value accelerated again. Experts predict the price increase will affect houses, villas, and new construction. In addition, the market needs more land for construction, which will also affect the cost of objects.
Overall, experts are optimistic about 2023. In their view, the real estate market will grow through increased demand.