Thailand has always attracted Russian tourists and property buyers with its warm climate, moderate living expenses, and variety of entertainment. Buying villas in Thailand has been extremely popular with Russians wanting a second home in the tropics. The coronavirus epidemic and other shocks of recent years have seriously changed the Thai economy. However, the situation is improving, and real estate in Thailand is regaining its position in the international market.
- Tourism and buyers
- Features of buying a house in Thailand
- The influx of Russian buyers to Thailand
- What to buy in Thailand in 2023?
- Three sought-after locations
- Villas in Thailand are more popular than apartments
- Real estate prices in Thailand in 2023
A feature of Thailand is the strong link between tourism and the sale of real estate. Foreign buyers rent out the numerous villas or apartments bought here, mostly to the same foreigners. Therefore, to revive the housing market, it was necessary to soften the conditions for visitors. And this was done. E.g., since June of this year, a mandatory quarantine was canceled for most tourists arriving in the country, and Russians no longer had to provide mandatory hotel reservations, insurance, and vaccination certificates. At the same time, several entertainment establishments were opened, and quarantine measures were relaxed throughout the country.
Not satisfied with half measures, the government, on October 1, 2022, completely lifted all the remaining entry restrictions. Now PCR tests or vaccination documents are not needed. Restrictions in bars, restaurants, and other places of attraction for vacationers and locals were also removed. In fact, Thailand decided to forget about the coronavirus which had a positive effect on the tourist flow. The period of visa-free stay has also been extended – until April 2023, without additional documentation, making it possible to stay in the country for 45 days instead of 30. This set of measures is bearing fruit. Recently, the arrival of the ten millionth tourist since the beginning of the year was celebrated. Restaurants are returning to the pre-pandemic indicators.
To revive the real estate market in the country, in October 2022, the government proposed to allow foreign citizens to buy land. Of course, with strict restrictions, the land area could not be over 0.16 hectares, and investments, including the cost of land, should be at least ฿40 million (about $1.1 million) for at least 3 years. Only holders of long-term visas were allowed to buy land, which also narrowed the circle of potential investors. However, the project was not approved by the relevant ministries and was sent for revision.
As a result, the situation remained the same. Today, foreigners can purchase detached houses, but have to rent land for a long time (leasehold). Moreover, owning a property does not affect the visa status or obtaining a residence permit. There are ways to circumvent these restrictions by purchasing a property for a legal entity that has a balance of ownership between a Thai citizen and a foreigner, but few buyers go for these tricks. Most overseas citizens are quite satisfied with the opportunity to freely dispose of purchased real estate for a long period (up to 90 years in leasehold).
This year, there was a serious rise in the number of Russian buyers of Thai real estate. Traditionally, the first place of foreign investors in Thailand is held by the Chinese by a large margin – every year, they buy more than half of all the real estate in the country. However, in the first half of 2022, the Russians became the largest buyers of apartments in Phuket – while in 2021, they bought 54 properties for the whole year, only in the first quarter of this year, Russian buyers became owners of 74 properties. This not only overshadows the results of 2021 but also leaves the Chinese far behind with 14 properties for the quarter. This is not surprising as the demand for Thai property amongst Russian buyers has almost quadrupled over the past year. Of course, in general, China is still significantly ahead of other countries, but Russia is confidently among the top 3 buyers, and this trend will continue.
Both villas and apartments in Thailand next year will be attractive to foreign buyers for transactions – for both living and renting. The main question in 2023 will most likely be – where exactly to buy real estate in Thailand?
Three famous areas of the country are still the most popular: Phuket as the main place of beach tourism, Pattaya as a more developed resort in terms of infrastructure, and, of course, Bangkok as the capital of the kingdom.
Taught by the hard experience of quarantine during the pandemic, buyers prefer to buy villas or houses in Thailand, not apartments. This is due to its privacy and minimal communication with neighbours. In addition, the villas show the best results in restoring and increasing the price level.
Houses with a good sea view have risen in price. Experts warn against buying apartments and villas with partial sea views, blocked by other real estate or terrain – these types of housing will fall in price, and the final discount on the sale can reach 40%. Other common parameters are also essential, i.e., the condition of the condominium or house, infrastructure, and transport accessibility. In general, the sea view is crucial for the liquidity of real estate.
Realtors expect an increase in prices for residential real estate in the kingdom by at least 10-15% after the restoration of air traffic and an improvement in the market situation. Recall that China is still closed to the main categories of citizens entering and leaving the country. These forecasts suggest investing in real estate in Thailand in the near future before the Chinese return to the kingdom's market.