Content:
- Key projects from 2022
- Results of 2022 and the forecast for 2023 in Thai real estate
- Real estate prices in 2023
- Housing trends in 2023
Key projects from 2022
In 2022, construction began on several major real estate projects in Thailand that will have a significant impact on the development of the respective areas. If you are planning to buy property in Thailand, look at the following projects and the properties in the surrounding areas.
- High-tech medical centre in Pattaya. A $250,000,000 development that includes the construction of a medical campus in Pattaya. Construction began in the 2nd quarter of 2022 and is expected to be completed in the 4th quarter of 2024. The development aims to improve the healthcare and medical facilities of the region. The opening of the medical centre is expected to precede the construction of new housing in its immediate surroundings and to attract buyers and tenants of an elderly demographic to the area.
- Tower of the Lumpini Ville Charan-Faichai condominium, worth $96,000,000. The development involves the construction of three high-rise condominium towers on Charansanitwong Road in Bangkok. In total, the towers will offer 1,482 apartments. Construction began in the 2nd quarter of 2022 and is scheduled to be completed in the 4th quarter of 2025. The development is geared towards improving living conditions in the older part of the city. Apartments in the development project in Thailand are already available for investment from potential buyers.
- Lumpini Condotown Ekachai 48 condominium, worth $36,000,000. The project involves the construction of eight 8-storey condominium towers in Bangkok. Construction began in the 2nd quarter of 2022 and is scheduled to be completed in the 2nd quarter of 2025.
- Ramintra medical complex, worth $26,000,000. The project involves the construction of a 10814 square metre hospital building consisting of 17 storeys and built on a 5.63-hectare site in Bangkok. Construction began in the 2nd quarter of 2022 and is scheduled to be completed in the 2nd quarter of 2024. The development aims to improve medical care in the region. The hospital will be an innovative and versatile medical centre where modern technologies will be applied. The development is part of a government program aimed to increase the flow of medical tourism to the country.
- Bangkok One, a multipurpose centre in Bangkok. The development’s cost is $3,900,000,000. The centre is expected to be opened in phases between 2023 and 2026. The complex includes 5 office towers and 3 towers with hotels and apartments connected by a shopping centre. It is also planned to open art and cultural centres and improve 8 hectares of parkland through innovative cultivation. The complex will be directly connected to Lumphini underground station through an underpass. It will become the centre of a new business district development in the capital of Thailand and will change the real estate market in the area. The real estate prices in the area adjoining the off-plan development will rise immediately after the first phase of construction is complete.
In Bangkok and other cities in Thailand, many other developments have been put into operation which should be considered.
Results of 2022 and the forecast for 2023 in Thai real estate
2022 was the year when the Thai property market finally recovered from the prolonged crisis associated with the COVID-19 pandemic. The rental market has also begun to show positive signs given the renewed flow of tourists.
However, the Bangkok rental price index is down 3% year on year and down 14% from the year before the pandemic. In the 3rd quarter of 2022, the demand for the purchase of real estate decreased by 10% compared to the previous quarter due to inflation and increased household debts, which in general led to a decrease in the purchasing power of the population. At the same time, compared to the same period last year, the demand increased by 16% year on year, and by as much as 58% compared to the same period before the pandemic.
According to the latest consumer sentiment survey report in Thailand, 57% said they plan to buy a property within the next year, while 7% still prefer to rent a property. 35% do not plan to buy or rent during this period. However, only 25% of consumers currently have the means to buy real estate. 47% of consumers have only half the savings needed to make a purchase, and 22% have not yet started saving to buy a home. This shows that many consumers intend to buy real estate soon, but they will find it difficult to do so without careful financial planning. As such, the demand for real estate in Thailand from locals is higher than ever - but the low incomes of the population forced sellers to reduce prices in 2022. At the same time, it can be assumed that as foreign buyers, mostly from China, return to the market - prices for local real estate will begin to rise rapidly.
The pace of construction and the commissioning of new developments continue to gain momentum after slowing down in 2019-2021. In 2023, many developments are expected to be launched in various sectors of the real estate market across the country.
Real estate prices in 2023
Since the new year, new estimated prices for land have been announced, which will have an impact on prices in the real estate market throughout the country. The new figures will be used during 2023-2026, starting on the 1st of January 2023. The revaluation was performed for the first time in 3 years due to it not being performed in 2020 due to COVID-19. On average, prices for land plots are expected to rise by 8.93%.
In this instance, land prices will be raised throughout the country. At the same time, prices also increased in 2022 but were isolated to certain areas of the country. The areas with the largest year-over-year land price increase in 2022 were in the provinces of Samut Prakan, Nonthaburi and Pathum Thani. In Bangkok, the price increased the most in the Huay Kwang area (by 21.46%) due to the opening of a new branch of the Orange Line electric trains.
The areas with the highest real estate prices in Bangkok are central Silom, Plongchit, Ratchadamri, Sathorn, Sukhumvit and Yaowarat.
A negative impact on the housing market in 2023 will lead to a change in state policy regarding assistance in the purchase of real estate: all support measures that were introduced during the pandemic will be cancelled.
Real estate prices will rise by 5-10% this year in line with rising land prices, higher interest rates and rising construction costs.
The market is likely to be more sluggish as the removal of incentives will hit local buyers hard but an increase in the activity of foreign buyers is expected, including the full return of Chinese investors.
Housing trends in 2023
It is worth noting that the city centre is no longer among the best areas to buy a residential real estate unit in Bangkok. The city has expanded, and although there are properties for sale in the central business district, prices there will be out of reach for most buyers.
In 2022, condos continued to be the most sought-after by over half of potential buyers. They are followed by detached villas and townhouses. 42% of potential apartment buyers want to purchase an apartment in the price range of 1 to 3 million baht, while potential buyers of private houses are willing to shell out a maximum of BHT 10,000,000 for their future villas. In terms of price, townhouses cost nearly the same as condos and 48% of potential buyers are willing to pay BHT 1,000,000 to 3,000,000 per unit.
Three main trends in the residential real estate market for 2023 include:
- Energy. Developers tend to pay more attention to energy savings and solar panels will be installed in more properties to reduce energy costs. In particular, the choice of materials in construction will change and materials that help save energy will be used. The installation of rooftop cooling systems, charging stations for electric vehicles, energy monitoring systems to check energy use in the property, and further energy-conscious facilities will be incurred. These devices should become the new living standard in 2023.
- Environment. According to the study, 85.2% of Thai consumers prefer to live closer to nature and this preference will affect the design of real estate in the future. Due to this preference materials that have the least environmental impact will be preferred. In particular, the use of waste separation and collection services will be developed.
- Healthcare. In addition to housing construction, healthcare is considered. Placing hospitals in every district and region will become the new standard.
The recovery of the economy and the tourism industry in the last quarter of 2022 are indicators that the real estate market will recover from its downturn in the coming year.
In early 2023, new offerings will hit the market as developers and landowners start reselling their properties to meet demand from high-end consumers and foreign investors.
It is worth noting that 2023 will remain a challenging year for buyers as property prices and interest rates continue to rise. Part of the market is focused on foreign buyers, especially in resort towns. 2023 is expected to see the return of Chinese investors, who for many years have held a leading position in foreign investment in Thai property. Against the backdrop of a likely slowdown in market growth and the upcoming increase in tourist flow, 2023 will be a good time to buy an apartment in Thailand, primarily in resort regions and in the country's capital, with emphasis on property close to new social facilities that are currently under construction.