How lucrative is it to invest in the Real Estate business in Thailand

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In 2021, the Thai real estate market showed sluggish growth due to various factors, including the pandemic that has knowingly impacted most industries. While it’s true that buyers have postponed, delayed, or even cancelled their property searches and buying processes, with the reopening of the Thai economy, home buyers have started to seize the opportunity of buying undervalued properties.

Looking at 2022, the Thai real estate market is projected to recover. It is particularly true for condominiums, which doesn’t show signs of oversupply and remain attractive for both local and foreign buyers.

Thailand House Price Index (HPI)

The above graph shows the house price index or percentage changes in house prices over 10 years in Thailand using the latest data available. Despite Thailand’s economic woes, the real estate market is picking up and is expected to do well. Both, domestic and foreign buyers, are still willing to spend to buy properties in Thailand.

Buyers, sellers, and renters from globally are becoming a part of the country’s real estate sector whether they are working as one of the many foreign retirees or ex-pats living here.

House prices in Thailand have been declining for couple of years now due to the slow economic growth, high household debt, and strict new loan-to-value (LTV) requirements demanding higher deposits. Pandemic has also directly impacted the Thai consumers purchasing power, which led to stagnant property prices in Thailand.

Can foreigners buy a Property in Thailand?

In Thailand, foreigners can only own a condominium in their own name. Foreigners could take ownership of a condo by buying a condo unit with a freehold title or by entering into a long lease agreement. Foreigners can attain the freehold ownership of the condo unit within the quota set for foreign ownership of a condominium.

As per Thai law, foreigners could own up to 49 per cent of the condominium project’s total saleable area. The remainder of 51 per cent could be acquired under the leasehold ownership. Leasehold ownership provides the right of possession and use of the unit for a defined time period and is fully transferable. The lease period is a maximum of 30 years which can be renewed further for 30 years. In most cases, condominiums developers offer a 90 years ownership period (30 years + 30 years + 30years).

For foreigners, investing in properties in Thailand would often get more bang for their bucks compared to their home countries. Rental properties in the city of Bangkok are high in demand from tourists and long-term residents. And, the south of Thailand also offers some great opportunities in the rental income space as most travellers wish to stay in luxurious residences along the coast.

Is this the Best Time to Invest in Properties in Thailand?

Now is the best time to invest in properties in Thailand at below pre-pandemic prices and wait for prices to rise as the Thai economy reopens for business. It would start taking effect once international travel normalizes with the reopening of international borders and particularly when the US and China become confident with their international travel again. Once it happens investors would be sitting pretty with an appreciated property asset that continues to appreciate. It will also offer the opportunity to benefit from a growing tourism sector through stable holiday rental income.

Real estate investment in Thailand has always been a safer play while stocks, commodity and bonds trading could be volatile. Thailand’s property market has traditionally retained its value well in spite of various crises over the decades.

The pandemic has transformed the way we work and live. The advent of remote working is an opportunity for start-up businesses in Thailand offering professionals with rental homes and villas to recalibrate their work-life balance. Being able to work away from crowded cities has become appealing for urban-dwellers and gives a good opportunity for starting a business in Thailand in this sector.

Future investment

Purchasing property in Thailand as an investment is a good choice as the country has seen a stable increase in real estate prices as demand in Thailand continues to stay on the stronger side. Thailand remains unswerving in its development, with modern networks of roads and connections to main commercial and industrial centres. Thailand also offers amenities that rival that of expats’ home countries.

With modern medical facilities, business facilities, accommodations, and fast internet connectivity, living in Thailand certainly have its perks. Exclusive locations also drive the property prices, offers great investment opportunities in Thailand it’s real estate sector.

One other way to maximize your return on investment, including buying and leasing out your property in Thailand. It’s a faster way to earn profits from your investment. Most of the investors take this route as the possible rental yields are approx. 5% making foreign investment in Thailand a great opportunity. As it’s only an average and a ballpark figure, rental yields could be higher in exclusive locations.

Investors in Thailand’s real estate sector would surely find a route to see a great return on their investments. From buying a deluxe condo in the heart of Bangkok city to renting out the property in the South, the property market in Thailand is definitely hot. Even with the pandemic wrecking parts of the Thai economy, the real estate market in Thailand is expected to make a comeback as early as later this year. And, the current pandemic makes it an optimal time for buying properties along the coasts which are at an all-time low, the future would surely yield great returns for investors who invest now.

Why Buy Property in Thailand?

A large number of ex-pats buy property in Thailand which is comparatively high than any other Asian country. There are numerous reasons why Thailand is among the most popular real estate destination for investors worldwide.

Business-Friendly Environment 

Thailand has rich natural resources along with a comprehensive IT network across the country. Additionally, Thailand offers modern transport and communication facilities and a skilled workforce. All of these offer business opportunities in Thailand, and these services and infrastructures are one of the prime reasons why investors and entrepreneurs flock to Thailand.

Heaven for Digital Nomads

The city of Phuket in Thailand ranks at the top of the list for digital nomads as they work and can live there while enjoying a quality life at a comparatively low expense. The prices of properties in Phuket have hit rock bottom offering opportunities to open a small business in Thailand in the real estate sector.

Growing Economy

The country has made remarkable strides in expanding its economic freedom, subsequently moving shifting from a low-income country to an upper-income country. Experts also believe that by early 2023, Thailand’s real estate sector is expected to reach pre-pandemic levels. This projection is sooner than thought previously, with the easing of home loan regulations and the reopening speeding up the country’s recovery.

Strategic location 

Thailand’s Eastern Economic Corridor (EEC) is all set to become the gateway to Asia due to its strategic location, bringing together investment, trade and transportation.

Finding and Choosing your Property in Thailand

Since Thailand’s real estate sector isn’t highly regulated, it’s recommended that you take the help of a consulting agency. This way you can find the help you in navigating the local Thai regulations.

Also, for a business, it’s advisable to avail business consulting services as it could be a hectic system to arrange the deeds of ownership, and purchasing a home in Thailand without local help could be problematic. A specialist agent or a real estate business consultant will also offer helpful advice as well as insight into the local Thai market and will help you even with the local Thai language. There would be a fee to pay for their services, but they’ll help you in avoiding costly mistakes.

DDproperty Thailand Property Market Outlook 2022
Gradual recovery expected for residential market