Thailand's GDP is going up, the number of foreign investors in the real estate sector is even higher than expected in previous forecasts, and the economic situation in the country is favourable. This suggests that the market of real estate in Thailand is on the rise.
Content:
- Housing price index
- Foreign buyers
- In-demand real estate types
- Real estate market problems
- Housing market prospects
Housing price index
According to the report of the Real Estate Information Center in Thailand (REIC), the price index for new housing in Q1 2023 increased by 0.8% compared to the same period last year but decreased by 1.5% compared to Q4 2022, as the cost of expensive mansions for over 10 million baht declined. The price index for new apartments in Thailand as part of sales grew by 2% annually and 2.9% quarterly.
The overall price index for new residential complexes for sale in Bangkok and its surroundings in Q1 2023 was 128.3. The price growth amounted to 0.8% compared to the same period last year. This index in Q4 2023 was 127.3. Meanwhile, the overall housing price index fell by 1.5% compared to Q4 2022. This decrease was driven by a slight decline in prices to stimulate home sales based on the purchasing power of residents.
The price index for individual houses in Bangkok and its surroundings in Q1 2023 was 127.1, which is 1% more compared to the same period last year. However, it decreased by 3% compared to the previous quarter. The price index for townhouses in Bangkok and its surroundings in Q1 2023 was 129.7, which is 0.5% more compared to the same period last year and the previous quarter. As for 2023, the REIC expects the overall housing market index to decline slightly by 1.6% compared to 2022.
The price index for all housing categories in Bangkok fell by 7% compared to the previous quarter and 9% compared to last year. It is still below its pre-pandemic level (Q4 2019), with a gap of 23%. This indicates that the real estate market in Thailand has not yet recovered after COVID-19.
As a result, the house and condominium price index in Q1 2023 fell by 5% from the previous quarter. However, the overall demand for real estate increased by 36% in all types of housing compared to the pre-pandemic period.
The areas with the highest price index growth for Q1 2023 are as follows:
- The housing prices in Don Mueang have risen because a new metro line connecting three airports has been opened.
- The prices in Nong Khaem have increased because of the opening of a new section of the Hua Lamphong – Lak Song metro line.
- Saphan Sung is also experiencing a rise in housing prices. The opening of the Orange Line is scheduled for 2024.
- Bangna has become a place with a significant increase in prices as a result of the commissioning of many new buildings. Most of these houses are low-rise.
- The construction of a new metro line made the price index rise in Sathorn in the last quarter.
Foreign buyers
China's basic state policy of opening-up has had a positive impact on Thailand's recovery. The tourism sector and real estate markets have also contributed to this development. The Chinese are one of the main groups of foreign investors who prefer to buy Thai housing. Foreigners became more interested in purchasing Thailand’s properties in Q1 2023 — this figure rose by 57% year-on-year.
In-demand real estate types
Condominiums still occupy about 80% of the Thai property market. Private houses rank second by number, and townhouses are in third place. A great variety of brand-new low-rise buildings have been put up for sale, such as:
- single-family homes
- townhouses
- duplexes
That came from understanding the needs of consumers who want to have more living space in their homes.
Real estate market problems
The real estate market in Thailand in 2023 faced some problems. The main ones are:
- The decline in purchasing power associated with the ongoing economic downturn, inflation and rising interest rates.
- The termination of some government measures to assist the real estate sector. For example, the deregulation of housing loans.
- The slowdown in the decision to purchase real estate in connection with the recent elections. Thai and foreign investors wanted to clarify the new government’s housing policy.
Thailand’s property market is expected to gradually recover in Q2 2023 through the growing tourism sector and the return of investors from China and other countries.
Housing market prospects
- The condominium market in Bangkok. The market has been replenished with new projects over the past 3 years compared to the pre-pandemic period. Developers commissioned 12,000 new housing units in 2019 compared to 5,000 units in 2020 and 2021 and 3,498 units in 2022. Construction companies are expected to put into operation 50,000 new condominiums in 2023. The new development projects in Thailand will combine residential and commercial units. Developers want to increase the living space and make it more functional with the help of numerous green areas, recreation zones and the latest technologies.
- The low-rise housing market. The number of new homes decreased to 20,000 in 2021, and it grew to almost 35,000 in 2022. The same figures are projected in 2023.
- The premium real estate market. The number of luxury homes has increased. Four times more properties of this category were put on the market in 2022 than the average for the previous seven years. This trend is expected to continue this year.
In summary, the outlook for Thailand’s residential real estate market is optimistic. For more information, please contact our specialists, who you can contact right away. Experts will answer your questions and tell you how to buy a villa or apartment in development projects in Thailand.