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Real estate in Thailand is still amongst the most alluring markets in Southeast Asia. The income of Thai homeowners will increase as a result of new local government initiatives, economic growth, and a recovery in the tourism sector. We’ll explore what numbers Thailand can entice investors with below.
Content:
- Foreigners will be entitled to own land in Thailand by investing a minimum of 40 million baht in the national economy
- The Thai economy grew 4.5% on a yearly basis
- 28.3 million foreign tourists will visit Thailand in 2023
- The cost of housing real estate will go up by 5-8% in 2023 in Thailand
- Demand for housing units worth more than 20 million baht rose by 83% in Bangkok
Foreigners will be entitled to own land in Thailand by investing a minimum of 40 million baht in the national economy
For many years, foreigners have chosen Thailand as one of the top places to reside and invest in real estate. At the same time, there have always been restrictions on the rights of residents of other states to own local land plots. They were prohibited from freeholding the majority of the land and were only allowed to own up to 49% of any condominium as of the beginning of 2022. But things began to shift in the middle of the year.
The Thai government is attempting to lure wealthy foreign investors, particularly from China, to the nation. As a result, on July 15, 2022, the Prime Minister of Thailand, Prayut Chan-o-cha, suggested amending the law to permit foreigners to own land. Many government representatives concurred that such a programme would strengthen the economy and encourage affluent foreign investors to make investments in the nation's economy.
A new law was adopted in September 2022. Accordingly, foreigners were granted the opportunity to buy a land plot in Thailand up to 1 rai (approximately 1,600 m2), if they met the following requirement: they had to invest at least 40 million baht for at least three years in Thai real estate, stocks, or funds. Long-term leases, investing in local businesses, and participating in one of the many investment opportunities offered in the special economic zones established by the Thai government are additional options for people from other countries to acquire the right to own land there.
The Thai economy grew 4.5% on a yearly basis
Thailand's National Economic and Social Development Council (NESDC) reports that the third quarter of 2022 saw an almost two-fold acceleration in GDP growth over the first and second quarters (2.3 and 2.5%, respectively). Since the third quarter of 2021, the Thai economy has expanded by 4.5% overall.
By October, private consumption had grown by 9% year-over-year in Thailand, despite the rising inflation and the lingering risks of a worldwide crisis. The quarterly rise in 2022 in this indicator was the strongest in almost a decade. All the categories of consumer spending increased, with an 18.2% growth in durable items spending standing out. This, according to experts, is the result of pent-up demand as more and more people started investing in real estate and private vehicles once the pandemic had ended.
28.3 million foreign tourists will visit Thailand in 2023
The recovery of the tourism sector and a sharp rise in the number of overseas tourists to Thailand also contributed to the economy's quick expansion. According to the NESDC information, 3.6 million foreign visitors arrived in Thailand in the third quarter of 2022. This remarkable number is a result of the removal of international travel restrictions.
It's predicted that a total of 10 million foreign visitors will come to Thailand in 2022. The Tourism Authority has set this as its goal. Somprawin Manprasert, of the Head-Research Division at the Bank of Ayudhya Public Co., Ltd, estimates that, based on the current trend, 28.3 million foreign visitors will come to the nation in 2023.
"As the export growth slows down, the Thai economy will be primarily driven by tourism and a recovering service sector in the upcoming year," Mr. Somprawin predicted.
The local real estate market will benefit from the rise in tourist traffic. Numerous experts anticipate that these changes will raise the demand for residential and commercial property in Thailand, increasing the values and rental rates.
The cost of housing real estate will go up by 5-8% in 2023 in Thailand
The value of Thai residential property may rise by 5-8% (compared to the 2018 valuation applied so far), as a result of the spike in land prices that will follow the revaluation due on January 1, 2023. The cost of construction materials and electricity will also go up, which will have an impact on this trend.
This is fantastic news for foreign investors planning to purchase residences and apartments in Thailand before the year is up. They will have the opportunity to profit greatly from capital gains in 2023.
Demand for housing units worth more than 20 million baht rose by 83% in Bangkok
In Bangkok, there was still a high demand for homes throughout the first three quarters of 2022. Interest in properties priced between 10 and 20 million baht surged by 53.1% in the third quarter of 2022, in comparison to the second quarter of the same year. In the same period, the demand for luxury residences costing at least 20 million baht grew by 83%.
Between January and October 2022, Bangkok experienced the biggest concentration of housing demand for homes ranging in price from 5 million to 10 million baht. with 25.1% of all the requests being for these types of units. The demand for homes between 3 and 5 million baht and those under 3 million baht was slightly lower, with 23.6% of all requests being for one of these types of properties.
When it comes to layouts, homes with four or more bedrooms were the most popular. From January through October, 38.3% of all housing requests were for such houses. This number is close to 25% in Bangkok's surrounding provinces.
