Thailand Real Estate Price Index
Real estate prices in Thailand have seen a gradual increase over the past decade. The COVID-19 pandemic has slowed this down, but it is expected to rebound.
The index includes four indicators: single detached house with land, town house with land, condominium, and land. They are calculated from 17 commercial banks’ mortgage loan nationwide (Bangkok and vicinity, Nakhon Pathom, Samut Prakan, Pathum Thani, and Nakhon Ratchasima).
Land prices on the outskirts of Bangkok saw double-digit increases this first quarter.
With a positive outlook for the economy and lower property prices, Thailand offers a strong opportunity for residential investors. Its rental yields are higher than those in other Southeast Asian countries and offer more value for your money. However, it is important to seek expert guidance before investing in Thai real estate.
The price index of low-rise houses and condos in Greater Bangkok rose by 0.3% quarter-on-quarter and 0.7% year-on-year in the first quarter of 2023. This was due to the cost-push effect from rising minimum wages, increasing construction costs and higher bank mortgage rates.
The residential market in Thailand continues to grow despite the COVID-19 pandemic, with the most significant growth occurring in Bangkok and vicinities. This is largely attributed to the fact that most projects in Bangkok and its outskirts are affordable for most local and foreign buyers. Additionally, investment in the expansion of public transportation facilities such as the MRT and future mass transit lines has boosted the price of land near these routes.
Despite challenges, the commercial market in Thailand is still showing signs of recovery. However, it is important for potential buyers to be financially stable and exercise financial discipline to navigate the challenges ahead. This will require them to understand the current economic landscape and financial markets, which could slow down purchasing activities in 2023.
The property price index for the city of Bangkok and its surrounding areas rose in the first quarter of 2023. The growth was mainly due to higher land prices on the outskirts of the city. The outskirts of the capital saw the highest land price increases in the districts of Nakhon Pathom, Samut Prakan, and Muang Pathum Thani.
The growing population in the country is driving demand for commercial properties. The country also has a thriving infrastructure, which helps attract foreign businesses. This includes the new Suvarnabhumi International Airport, which opens up a significant commercial opportunity in eastern Bangkok. In addition, the country has lower labor costs than most developed countries in Asia.
As a manufacturing hub, Thailand is an attractive destination for commercial real estate. Its thriving economy and robust infrastructure have attracted businesses seeking cost-effective production and warehouse facilities. In addition, it offers a low labor cost and favorable tax policies. The country is also home to many world-class companies, including automotive manufacturers and related suppliers.
In 2023, the residential market is expected to continue growing, driven by urbanization and changing lifestyles. The government’s tax incentives and deductions are encouraging buyers to invest in new projects. However, the current economic uncertainty is limiting the purchasing power of many buyers, and this could lead to a slowdown in property prices.
Single-detached house price indices are calculated using dummy and time dummy hedonic regression models (3-month moving average) and controlling for four housing characteristics (age, stories, entrepreneur, and distance to metropolitan transportation services). The data are based on 17 commercial banks’ mortgage loan appraisal databases nationwide. The price indices include both new and resale properties.
The tourism industry in Thailand is expected to return as a major contributor to GDP growth next year and beyond. Many businesses in this sector are adapting to a Bio-Circular-Green economy model, which they hope will appeal to a younger generation of tourists who prioritize sustainable travel.
Domestic consumption is also helping to boost the economy, with retail sales rising for the second quarter in a row and domestic demand for houses continuing to increase. This is despite global financial market volatility and uncertainty over the formation of a new government, Sakkapop said.
Inbound arrivals rebounded in 2022 from their lowest level since the COVID-19 pandemic began, with tourists from South Asia showing strong growth, but the outlook for Chinese tourism remains cloudy as a result of a sagging economy and heightened security concerns. Meanwhile, Brexit may dampen inbound interest from British tourists. The country is also facing stiff competition from other destinations in the region and around the world.