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Real estate in Thailand has specific development characteristics that have arisen from the historical formation of the region. Bangkok and its central districts of Wattana, Khlong Toei, and Huai Khwang illustrate this. Main roads pass through here so the real estate sector was created to offer housing next to transport arteries.
We will tell you more about Thailand’s real estate market, its features, and various types of housing in the article.
Content:
- Features of the real estate market in Thailand
- Reasons to invest in real estate in Thailand
- Rooms and studios
- Apartments in residential complexes and condominiums
- Serviced apartments
- Detached house and townhouse
- Villa and house
- Commercial real estate
- Land plots
- The current Thai real estate market
- We will help you purchase real estate in Thailand
Features of the real estate market in Thailand
Condominiums dominated the Thai housing market in 2020 with 86% of the total market, while detached houses and townhouses account for 8% and 6%, respectively. Next, we will look at each type of property.
Reasons to invest in real estate in Thailand
- Lower prices than other tourist-focused countries;
- Attractive mortgage interest rates (from 5 to 7% depending on the bank);
- State policy to reduce fees for the transfer of property;
- Easing foreign mortgage lending rules by the Central Bank of Thailand (BOT);
- Discounts from developers;
- A way to make money on rent;
- Get a long-term visa and work remotely from Thailand.
Rooms and studios
What do the most budget-friendly housing options in Thailand look like?
A room is a separate living space with a shower and toilet and without a kitchen.
A studio is an autonomous living space with all the basic amenities. It has a living room, bedroom, and kitchen. There is a shower/bathroom and toilet. Studios have more space than rooms and some options have a living space of up to 100 sq. m. or more.
Apartments in residential complexes and condominiums
A condominium in Thailand is a multi-story building in which apartments are rented or sold.
According to CBRE, an international real estate consulting company in Thailand, the highest share of condominiums in 2021 was in the price category of up to ฿3,500,000 ($104,000). Most of the condominiums are in the three main districts of Bangkok: Wattana, Khlong Toei, and Huai Khwang.
Apartments in condominiums and apartments in Thailand in ordinary residential complexes are similar. Both options are buildings with many similar housing units that can be purchased or leased. Residents can use public spaces and other amenities within the area.
However, there are still differences between living in a condominium and an ordinary apartment. Unlike ordinary apartments, in condominiums:
- there is a specific management company responsible for maintaining the condominium (landscaping, caring for the surrounding area, cleaning inside the building, solving problems with water supply, etc.);
- payment for utilities and services of the management company is separate;
- there are accommodation rules that all residents must observe. For example, it is not allowed to leave personal belongings in shared areas in Thai condominiums (bicycles, strollers, and other items that residents usually store on stairwells and in entrances);
- garbage is collected separately;
- tenants of apartments in condominiums are prohibited from having pets but if the animal is small (rodent, fish), it is possible to negotiate with the owner.
An important condition! Foreigners can only buy or sell apartments in condominiums. This condition does not apply to residents as they can buy all types of property.
Serviced apartments
Would you like to feel the comfort of the premium class? The solution is serviced apartments. This type of property offers temporary or long-term housing with contracts lasting from a few days to a year or more. Like a hotel, this type of property includes weekly cleaning and/or lunch services. Such apartments are furnished and decorated, ready for the tenant to move in. This is a good option for those looking for everyday luxury or a short-term stay.
Detached house and townhouse
A detached house and an attached house can look the same inside and include 1 to 4 floors. The main difference between a detached house and a townhouse is that a townhouse is 1 house in a row of houses that share 1 wall.
A detached house is an independent building without a wall.
A semi-detached house/townhouse is a building of 2 houses separated by 1 wall. Unlike condominiums, townhouse ownership includes individual ownership of land. As foreigners cannot buy land in Thailand, this housing option is not for them.
Speaking of Bangkok, townhouses dominate the districts of Wattana, Lat Phrao, and Pravet and most detached houses are located on the outskirts of central business districts such as Pravet, Khlong Sam Wa, and Sai Mai.
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Villa and house
The word “villa” originally meant a premium country house in the ancient Roman style. Today, the detailed description corresponds to reality. Thai villas are the most prestigious housing option that includes not only a house with spacious rooms and first-class furnishings but also offers a swimming pool, garden, outbuildings, etc.
While a villa is always a house, a house is not always a villa. However, some real estate agents use this definition as a marketing tactic. Houses in Thailand differ in size and amenities. They can have one or more floors, a terrace, a private garage, a living room, and a dining room. The number of bedrooms varies depending on the size of the house.
Commercial real estate
Commercial real estate in Thailand consists of offices, coworking, warehouses, and industrial premises that are not available for purchase but can be rented out.
For a foreigner, Thailand is not the best country to invest in commercial real estate.
As a rule, a foreigner can only buy office spaces called strata (sometimes called office condominiums) as they fall under the Condominium Act.
Land plots
According to Thai law, a foreign national cannot own land in the Kingdom. Instead, you can lease a land plot for 30 years and extend it to 60 and 90 years. In this case, you can use the site or housing as you wish or for commercial purposes excluding resale.
The current Thai real estate market
In 2019-2020, due to the coronavirus pandemic, the real estate market in Thailand experienced a severe decline. Lockdown and associated restrictive measures blocked international travel as well as the tourism sector that created the housing market.
In 2020, condominium sales fell to 8,285 units, compared to 13,232 units in 2019. Thus, the drop was 35.3%.
In the second quarter of this year (Q2), the Thai market reached the lowest sales mark – 1,162 units. In comparison with the same period of 2019, the decrease was 61.1% and the value of transactions fell by 54.3%.
In Q3 2020, there was an improvement with a total of 1,885 condominiums purchased by foreigners for ฿9,381,000 ($278,653) and 2,592 apartments for ฿12,703,000 ($377,329).
Despite the recovery during 2021, the decline in Thailand's housing sector persisted due to low purchasing power.
Since the beginning of 2021, the housing price index had been declining and stabilized only by December. On the contrary, the supply index was growing. Developers in Thailand have focused on houses and villas. Trading Economics reports a 7% increase in supply in the Bangkok market.
Demand and cost
Condominium prices are declining as economic growth has slowed against a background of low purchasing power. Condominiums have been most affected by the decline in the number of local and foreign buyers.
The same cannot be said about villas, detached houses, and land plots. The situation is more positive. This is mainly due to a shift in consumer preferences for housing. Buyers and tenants preferred more living space and a higher level of comfort that only these types of real estate could provide.
The increase in demand confirms the increase in prices in this sector. In comparison with the figures of the fourth quarter of 2020, in 2021, the price index in the detached house sector increased by 10%. The townhouse market is also experiencing significant growth with costs up 8% compared to the same period in 2020.
Result
Due to the relaxation of quarantine measures in Thailand, buyers and investors with high purchasing power could try their hand in the Thai real estate market in early 2022. According to analysts of Thai real estate DD Property, buying an apartment in Thailand can be a good opportunity both in practical terms for living and in terms of long investments for resale.
We will help you purchase real estate in Thailand
Are you planning to buy an apartment in a new building in Thailand? Immerse yourself in the world of great deals on Thailand-Real.Estate. Here, you can find real estate from leading developers and proven homeowners in Thailand. In the catalog, you will see detailed photos and descriptions, find current prices for the housing you are interested in and a lot of information about Thai real estate.
You can get advice on renting, buying, selling, and moving to Thailand from the managers on the website. Specialists provide assistance and accompany the transaction process.