According to the IMF (International Monetary Fund), the Thai economy is expected to grow in 2019, mainly due to increased tourism and exports.
The number of expats applying for work permits, as well as foreigners who want to live in Thailand full-time, continue to rise. This indicates a positive growth for the Thai property market in 2019.
However, some experts and analysts expect that the market will lose steam in the coming years.
The year-on-year price changes have been in decline the past couple of years, showing that the market is slowing down. The price increases for land, condominiums, and serviced apartments have slowed down, while the townhouse segment is more resilient.
Overall, there’s no major signs that a property bubble will pop within the near future as the market has grown with a slow pace the past years, with no sharp increases.
According to the HBA (Housing Business Association), Thailand’s property market builds on real demand, not speculative demand, making the real estate market less risky.
What’s driving Thailand’s property market?
Below I’ve listed some reasons why I believe that Thailand’s property market will remain stable in the coming time.
a. Thai property is still affordable compared to other countries in the region like Mainland China, Singapore, and Hong Kong. Buyers from these countries still see Thailand, and especially Bangkok, as attractive spots to buy property
b. There are a number of new mega projects planned that will affect Thailand, and especially Bangkok, positively. Some examples are the EEC (Eastern Economic Corridor), China’s One Belt One Road project, several new metro lines, and other mass transportation projects. These projects will enhance the infrastructure, driving future growth
c. The quality of new residential units in Thailand is above par, with well-known brands and international developers working in the Thai real estate market. Foreign partnerships with local developers continue to increase. Several Japanese developers, like Tokyo Tatemono Co., have entered the Thai market in 2018
d. There’s a constant increase of foreign buyers and the government continues to introduce investment-friendly policies. Almost 25% of the buyers in the upscale areas of Bangkok are foreigners
New property projects in Bangkok
There are hundreds of new condominium and apartment projects under construction in major cities, with many located in Bangkok.
You can find most of these projects along the new MTR lines that are currently under construction, and expected to be completed soon.
As mentioned, Thailand plans to build several mega projects to uplift its infrastructure. This is well-known among international developers that flood the market to build condominium units close to the new infrastructure.
These areas offer great potentials for price increases in the future.
In Bangkok alone, there are around 100,000 condominiums units under construction, planned to be completed in Q4 2018 and in 2019. There’s a high demand for serviced-apartments, with around 60% of these apartments located in the Upper and Lower areas of Sukhumvit.
Thailand’s changing demographics
Thailand faces challenges due to demographic issues. It’s ranked number 3 globally in terms of fastest shrinking working age populations.
Vietnam, on the other hand, has a population that will increase from around 95 million to 120 million until 2040, and 50% of the population are below 30 years old. We see a similar trend in the Philippines.
So far, the demographic issues have been negated due to the increased number of foreign investors.
One thing is certain for the Thai market: expats and other foreigners have helped to keep the market above the surface.
Thailand’s property market has remained positive and fairly steady in the last decade. It will most likely remain the same in 2019, despite some warnings that the market may slow down.
The market performs differently depending on where you buy. Cities like Bangkok and Chiang Mai are expected to grow with a decent rate, but that’s not the case in other cities, where the market has slowed down significantly more.
You should also keep in mind that the market performs differently depending on property types and locations. The luxury segment with properties located in the central areas in Bangkok continue to attract a vast number of foreigners.
Low and medium priced properties in the suburban areas, that are mainly built to cater Thai buyers, has seen a greater oversupply, and with a more shaky market.
All in all, as long as we see a continuous demand from foreigners expats, we can expect a positive growth, especially for properties located in strategic and central areas.