Five Exciting Figures for Thai Real Estate Investors

Five Exciting Figures for Thai Real Estate Investors

Real estate in Thailand remains one of the most attractive markets in Southeast Asia. The income of Thai property owners is expected to rise due to new government initiatives, economic growth, and the tourism sector's recovery. Below are the key figures that make Thailand an enticing market for real estate investors.

CONTENT:

1. Foreigners can own land in Thailand by investing at least 40 million baht in the national economy.
2. The Thai economy grew by 4.5% year-on-year.
3. Thailand will welcome 28.3 million foreign tourists in 2024.
4. The cost of housing in Thailand is expected to increase by 5-8% in 2024.
5. Demand for housing units worth more than 20 million baht surged by 83% in Bangkok.

FOREIGNERS CAN OWN LAND IN THAILAND BY INVESTING A MINIMUM OF 40 MILLION BAHT IN THE NATIONAL ECONOMY

For many years, Thailand has been a top destination for foreigners seeking to live and invest in real estate. However, restrictions limited foreign ownership of land, allowing non-Thai nationals to own only up to 49% of any condominium unit. But this began to change in mid-2023.

In an effort to attract wealthy foreign investors, particularly from China, Thai Prime Minister Prayut Chan-o-cha proposed amending the law on July 15, 2023, to allow foreigners to own land. The government believes this move would strengthen the economy and encourage more foreign investment.

In September 2022, a new law was enacted granting foreigners the right to purchase up to 1 rai (approximately 1,600 m²) of land, provided they invest at least 40 million baht for a minimum of three years in Thai real estate, stocks, or funds. Additional options for acquiring land ownership include long-term leases, investments in local businesses, or participating in investment opportunities in special economic zones established by the Thai government.

THE THAI ECONOMY GREW BY 4.5% YEAR-ON-YEAR

According to the National Economic and Social Development Council (NESDC), Thailand’s GDP growth nearly doubled in the third quarter of 2022 compared to the first and second quarters (2.3% and 2.5%, respectively). The Thai economy grew by 4.5% overall compared to the third quarter of 2021.

By October, private consumption had increased by 9% year-on-year, despite rising inflation and ongoing global economic risks. The quarterly rise was the strongest in nearly a decade, with durable goods spending growing by 18.2%. This surge in demand reflects the post-pandemic trend of increased investment in real estate and vehicles.

The rapid recovery of Thailand's tourism sector and the sharp increase in the number of foreign visitors have significantly contributed to the country’s fast economic growth. According to the National Economic and Social Development Council (NESDC), Thailand welcomed 3.6 million foreign tourists in the third quarter of 2022, thanks to the easing of international travel restrictions.

It is predicted that a total of 10 million foreign visitors will travel to Thailand in 2022, a goal set by the Tourism Authority of Thailand. Somprawin Manprasert, Head of Research at Bank of Ayudhya Public Co., Ltd, estimates that based on current trends, Thailand could see 28.3 million foreign visitors in 2023.

«As export growth slows, tourism and a recovering service sector will be the primary drivers of the Thai economy in the coming year,» said Somprawin.

The influx of tourists will also boost the local real estate market. Many experts expect this increase in tourism to raise demand for both residential and commercial properties in Thailand, driving up property values and rental rates.

The Cost of Housing Real Estate Will Increase by 5-8% in 2023 in Thailand

Thai residential property values are expected to rise by 5-8% in 2023, compared to their 2018 valuation, due to a surge in land prices that will follow the revaluation on January 1, 2023. The increasing costs of construction materials and electricity will also fuel this trend.

This is excellent news for foreign investors who plan to purchase homes and apartments in Thailand before the end of the year, as they stand to benefit from capital gains in 2023.

Demand for Housing Units Worth Over 20 Million Baht Rose by 83% in Bangkok

In the first three quarters of 2022, Bangkok saw strong demand for housing. Interest in properties priced between 10 and 20 million baht increased by 53.1% in the third quarter compared to the second quarter. Even more notably, demand for luxury homes priced at 20 million baht or more surged by 83%.

Between January and October 2022, most of the housing demand in Bangkok focused on homes priced between 5 million and 10 million baht, accounting for 25.1% of all inquiries. Homes priced between 3 million and 5 million baht and those under 3 million baht accounted for 23.6% of inquiries.

When it comes to layouts, houses with four or more bedrooms were the most popular, making up 38.3% of all requests. In Bangkok's surrounding areas, this figure was close to 25%.