Thailand’s property market has consistently attracted investors seeking lucrative opportunities. However, like any dynamic market, it experiences its fair share of fluctuations and trends. According to the DDproperty Thailand Property Market Q3 2023 Report, residential property sale prices in Thailand have been on a decline since the pandemic, but there are positive signs of recovery in the rental market.
In this article, we’ll delve into the current market conditions in Thailand and share our outlook for 2023 and beyond.
Bangkok’s residential properties for sale
The residential property market in Bangkok has witnessed recent shifts.
Pricing
The price of residential property in Bangkok rose by 1% in the past quarter. However, it is still 6% lower than a year ago and 10% lower than the same period before the pandemic (Q2 2019).
Different property types have shown different trends. Single-detached houses saw a 2% quarter-on-quarter (QoQ) increase but remained 5% below year-on-year (YoY) prices and 13% below pre-pandemic levels. Townhouses experienced a 1% QoQ increase but were down by 2% YoY and 6% from the pre-COVID-19 period.
On the other hand, condos showed a 1% QoQ increase but struggled with an 8% YoY decline and a significant 25% dip from pre-pandemic levels.
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Demand
The demand for residential property in Bangkok decreased by 4% in the past quarter and 32% compared to the previous year. Nevertheless, it’s worth noting that the demand is still 7% higher than before the pandemic.
In terms of property type, the demand for landed properties (e.g., single-detached houses and townhouses) is stronger than for condos.
Single-detached houses experienced a 2% QoQ decrease but remained 32% above YoY levels and 20% higher than pre-pandemic demand. Townhouses exhibited a 1% QoQ increase, a 24% YoY drop, and a remarkable 27% surge compared to pre-pandemic demand.
On the other hand, condos faced a decline in both short- and long-term demand, with a 4% QoQ drop, a 33% YoY decrease, and a 1% dip from pre-pandemic levels.
Location
Certain areas on the fringes and outskirts of Bangkok, with easy access to mass transit routes like the Pink Line and Green Line, have seen substantial price increases in the latest quarter:
- Khan Na Yao District: +15% QoQ
- Bang Kho Laem District: +8% QoQ
- Saphan Sung District: +7% QoQ
- Bang Khen District: +7% QoQ
- Bueng Kum District: +6% QoQ
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Key takeaways
The Bangkok residential property sale market is still recovering from the pandemic. Prices remain below pre-pandemic levels, but there has been a recent increase compared to the previous quarter, indicating potential for capital appreciation in the medium to long term. Landed properties (single-detached houses and townhouses) are performing better than condos.
The demand for residential property in Bangkok experienced a recent drop, but it’s worth noting that it’s 7% higher than pre-pandemic levels. This suggests that there is potential for growth in the future as the market stabilises.
Landed properties are performing better than condos, so it may be best to focus on purchasing single-detached houses or townhouses as these appear to be more resilient and have stronger demand compared to condos.
Location-wise, purchasing properties in Bangkok’s fringe and outskirt areas with mass transit access may present promising investment opportunities. These areas have witnessed rising property prices, indicating that these properties are becoming increasingly desirable and valuable.
There are a number of reasons for this. First, the new mass transit routes make it easier and faster to commute to and from these areas. Second, properties in these areas are generally more affordable than properties in the city center, making them a good option for first-time buyers and budget-conscious investors. Third, these areas are still developing, which means that there is potential for capital appreciation in the medium to long term.
Bangkok’s residential properties for rent
Rental properties in Bangkok have demonstrated resilience and potential in Thailand’s property market.
Pricing
Rental prices have increased for both landed properties (e.g., single-detached houses and townhouses) and non-landed properties (e.g., condos and apartments).
Landed properties saw an 8% QoQ surge, maintaining the same level as the previous quarter and marking a remarkable 51% increase from pre-pandemic levels. Conversely, non-landed properties witnessed a 3% QoQ rise and a 4% YoY increase but remained 9% below pre-pandemic levels.
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Demand
The demand for Bangkok rental properties recorded a significant 13% QoQ increase. Despite a 30% YoY decline, it is still remarkably 108% above the pre-COVID-19 levels.
In terms of property type, condos maintained a 14% QoQ demand, despite a 30% YoY decrease. Demand for condos impressively stands at a 143% increase from pre-pandemic levels.
For landed properties, single-detached houses showed a 6% QoQ demand increase. Although their YoY demand decreased by 33%, it remains stable compared to pre-pandemic levels. In contrast, townhouses exhibited a 4% QoQ demand increase, with a 30% YoY drop and a 2% gain compared to pre-COVID-19 demand levels.
Location
Rental properties near the Skytrain, subway, and commercial areas experienced notable rent increases:
- Thung Kru District: +24% QoQ
- Thawi Watthana District: +21% QoQ
- Lat Phrao District: +16% QoQ
- Nong Khaem District: +13% QoQ
- Bang Khen District: +10% QoQ
Key takeaways
The rental market in Bangkok is robust, with both rental prices and rental demand on the rise. This presents a favorable environment for potential investors, as it indicates a high likelihood of finding tenants and achieving a strong return on investment.
Condos may be a better investment choice for potential investors, given their substantial increases in rental prices and demand compared to landed properties. However, it’s important to note that there is still demand for landed properties, and they may offer a higher rental yield in the long term.
The highlighted locations show a strong demand for rental properties, so investing in such areas is likely to yield a favorable rental income.
Conclusion
The current real estate market in Thailand leans in favor of buyers, with prices remaining below pre-pandemic levels despite a slight uptick in demand. This suggests that it could be a good time for potential investors to consider buying property.
However, investors should exercise caution and consider the challenges and uncertainties in the short to medium term, including high household debts, slow economic recovery, and political instability. These factors may be why many home seekers are postponing their purchase decisions.
Nevertheless, this delay could be temporary. If these issues are resolved or if there is more stability in the future, it could lead to an upswing in real estate demand.
Furthermore, there is a growing trend among Thai home seekers to prefer renting over buying property due to factors such as flexibility and freedom from long-term debt commitments. For potential investors, this suggests that investing in rental properties aligns with current consumer preferences and could prove to be a lucrative option.
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