Expats in Thailand are interested in purchasing residential properties, which makes it more difficult for locals to buy a home. The government is contemplating actions to boost the market.
Thai property industry: the primary focus
- There was a 2.6% year-on-year rise in the Thai real estate index in Q2 2024. Townhouse prices rose by 3.12%. There was a 3.85% growth in detached houses in Bangkok, the highest increase.
- The rise in the interest rate and the disparity between income and real estate value caused a decline in transaction volume. Simultaneously, there was a 25% rise in demand from overseas investors primarily driven by investors from China, Russia, the USA and Myanmar.
- The rental sector is impacted by the decrease in the locals' buying power. The cost of renting low-rise housing rose by 28% in the index, while apartments saw a 22% increase. The annual return on commissioned real estate amounted to 6.27%.
- The construction industry has become less active: building permits dropped by 1.9% in 2023 and by 6.8% in Q1 2024. The country saw a 0.5% rise in new projects, whereas Bangkok experienced an 11.9% decline.
- The number of commissioned complexes decreased by 6.6% in 2023. Most provinces saw a decrease in this activity, with the exceptions being Chonburi and Phuket. Experts anticipate that the trend will persist in 2024.
Prospects
Experts predict that the price of housing will keep increasing at a moderate pace. The government plans to boost the market by offering tax advantages and special deals to international buyers. Due to the ongoing growth in tourism, with 17.5 million foreign visitors in the first half of 2024, economic growth is predicted to rise by 4% in 2024 as a result of the measures implemented.