Navigating Bangkok's property landscape: Key insights for 2024

DDproperty Editorial Team
Navigating Bangkok's property landscape: Key insights for 2024
Bangkok’s property market presents a unique landscape, marked by both challenges and opportunities. DDproperty’s Thailand Property Market Outlook 2024 report unpacks the key trends and developments that will shape the market this year, empowering homeowners and property investors to make informed decisions.

2023 in retrospect

The previous year painted a multifaceted picture for the Bangkok property market. Here’s a closer look at the sale and rental segments:

Sale market

The sale market painted a picture of cautious optimism, with overall residential property prices in Bangkok dipping by 5% year-on-year (YoY) and even further (7%) compared to pre-pandemic levels.
Despite this overall decrease, certain districts, particularly those in the city fringe, central business districts (CBD), and outskirt areas, experienced noteworthy growth.
AreaPrice Index (YoY)
Saphan Sung District+11%
Bangkok Yai District +10%
Khlong Sam Wa District +7%
Pathum Wan District +7%
Nong Khaem District +6%
Watthana District +6%
Bang Na District +5%
Bang Phlat District +4%
On the supply side, affordability reigned supreme. Residential properties priced between THB1-3 million and THB5-10 million dominated Bangkok listings (representing 25%), catering to budget-conscious buyers and those seeking mid-range options.

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Despite this availability, demand painted a different picture. The overall Demand Index for sales dropped by 31% YoY, reflecting a cautious market where many potential buyers held back due to financial constraints.
It’s important to remember that pre-pandemic demand stood slightly higher (+3%) than this level, indicating a cautious return to normalcy rather than a dramatic decline.

Rental market

The rental market offered a brighter outlook. Bangkok’s rental residential Price Index witnessed a healthy 9% YoY increase, with non-landed properties such as condos and apartments experiencing an even more impressive 10% rise.
This growth was particularly pronounced in areas near transportation hubs (BTS Skytrain and subway) and commercial areas, commanding higher rents.
AreaPrice Index (YoY)
Pathum Wan District+16%
Watthana District+13%
Khlong San District+12%
Bang Sue District +11%
Din Daeng District+10%
Bang Kho Laem District+10%
Ratchathewi District +9%
Thon Buri District +9%
Huai Khwang District+8%
Khlong Toei District+8%
These locations emerged as rent hotspots, attracting residents seeking a dynamic lifestyle that is close to the action.
As for tenants’ preferences, the 10,000-30,000 THB monthly range reigned supreme, suggesting a focus on affordability and value. However, The Rental Demand Index showed a 21% YoY decrease, highlighting a market adjustment, despite a remarkable 147% surge before the pandemic.

Charting the course for 2024: Embracing change and opportunity

This year, several key factors will influence the trajectory of the Thai property market:

Affordability concerns

Many potential buyers, particularly young adults, struggle to save enough for a down payment due to rising living costs and stagnant wages. This affordability gap fuels the "Generation Rent" phenomenon, where individuals increasingly opt to rent rather than buy.
While the high perceived cost of ownership might be a factor, many also prioritise saving money over immediate property acquisition.
This trend presents a double-edged sword for different market segments. On the one hand, "Generation Rent" translates to a potential booming demand for rental properties, particularly those catering to young professionals and students.
Investors focusing on mid-range and affordable rental units could find themselves well-positioned to capitalise on this shift.
However, the flip side reveals a potential dampening effect on the sale market. Developers and sellers might need to restrategise by adjusting prices or offering more attractive financing options to entice budget-conscious buyers struggling with affordability.
In essence, adapting to the evolving needs and financial realities of "Generation Rent" will be crucial for navigating the complexities of the Thai property market in the coming years.

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Rising prices

The increasing costs of construction materials, labour wages, and land are pushing property prices upwards. This could make homeownership even more out of reach for many, especially first-time buyers who are already grappling with affordability woes.
For those who already own property, rising prices could translate into increased equity and potential for higher resale value in the future.

Tightened lending landscape

Rising interest rates, courtesy of banks, are making borrowing pricier, which could put a damper on the dreams of buyers and investors relying on loans. This translates to potentially less market activity, especially for those eyeing properties as investment opportunities.
Banks are also expected to continue tightening their belts, demanding stricter eligibility and lower loan-to-value ratios, making it tougher for some, particularly first-time buyers with limited savings, to qualify for mortgages.
Exploring alternative financing solutions, such as government housing schemes or private lenders, could be crucial for buyers struggling to secure traditional bank loans.

Evolving needs

The ideal property of tomorrow will need to adapt to cater to a changing society:
Universal design: As the population ages, incorporating features such as wider doorways, ramps, and accessible bathrooms will become increasingly important to cater to a diverse range of abilities. This not only benefits seniors but also people with disabilities and young children.
Environmental consciousness: Eco-friendly features such as energy-efficient appliances, solar panels, and water-saving fixtures will be in high demand from environmentally conscious buyers and renters. Properties that prioritise sustainability could attract a premium in the market.
Pet-friendly living: Recognising the growing number of pet owners, properties that offer pet-friendly amenities such as designated walking areas, pet spas, and pet-washing stations will stand out from the competition. This can cater to a specific demographic and potentially increase rental occupancy rates.

A glimmer of hope on the horizon

While an immediate market recovery might not be around the corner, PropertyGuru’s Sale Demand Index offers a beacon of hope. Despite a recent decline in enquiries, the report hints at a potential rebound in demand sometime in 2024 or later. This suggests that market conditions could improve for sellers in the not-so-distant future.
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