Real Estate Investments in Thailand in 2024
Article contents:
- Thailand’s Economy – Stability and Opportunities
- Choosing an Investment Object: Where to Buy?
- Bangkok
- Established Tourist Areas
- Emerging Markets
- Types of Resort Real Estate Investments
- Renting Out Independently vs. Using a Management Company
- Short-Term vs. Long-Term Rentals: What to Choose?
- Investment Programs and Activities in Thailand
- How to Increase Investment Profitability
Thailand is deservedly considered one of the best countries in Asia for real estate investment, offering an attractive alternative to Europe and the Middle East. The Thai real estate market provides optimal opportunities for investors seeking balanced returns – neither too risky nor too conservative. It is not a high-stakes game with significant risks, as in some emerging markets, but it also offers better returns than very safe investments. Even funds from Singapore and Hong Kong prefer to invest in projects in Phuket rather than on their own islands. For many investors, Thailand strikes a golden balance between mature markets and developing ones.
Thailand’s Economy – Stability in Asia
Thailand's economy is one of the most stable in ASEAN. According to the IMF in 2023, Thailand ranks second in ASEAN for nominal GDP (574 billion USD) and fourth for per capita GDP. The 2024 forecast by the Bank of Thailand predicts GDP growth of 3.8%, affirming the country’s steady development.
Key drivers of growth include increased domestic consumption, the recovery of tourism, and rising investments. The Thai baht has demonstrated stability, maintaining an exchange rate of around 35-36 baht per USD for many years, which also reflects a strong economy.
Tourism remains a key part of the economy, accounting for around 20% of GDP, but exports remain the main growth driver. Despite challenges such as the pandemic and temporary drops in tourists from Europe and Russia, the country consistently overcomes crises, quickly recovering by attracting more tourists from China.
Real Estate Investments in Thailand in 2024
Article Contents:
- Thailand’s Economy – A Stable Island in Asia
- Choosing an Investment Object: Location
- Bangkok
- Established Tourist Locations
- Emerging Tourist Markets
- Resort Property Investments: Types of Investments
- Independent Rental vs. Managed Rental
- Short-Term vs. Long-Term Rentals
- Investment Activities and Programs in Thailand
- Increasing Investment Profitability in Thailand
The forecast for international tourist arrivals in 2023 is around 25-30 million people (80% of the peak figures of 2018-2019). The 2024 forecast predicts around 30-35 million tourists, approaching 100%. Some markets have already surpassed pre-COVID levels. For example, arrivals from Russia to Phuket are now higher than in 2019 and perhaps the highest in Thailand’s history as a tourist destination. The Chinese market, however, has not yet returned to pre-crisis levels.
The shortfall in absolute numbers is largely due to the delay in organized tour groups from China, but they are the target audience for only a limited number of hotels that work specifically with these groups. The current 3.4 million [international arrivals in Phuket for the first half of 2023] represent a broader market, including villa and condo owners, as well as hotel operators not tied to the Chinese segment.
Tourism drives demand for rental housing, not only from tourists but also from those working in the tourism and related industries, whether Thai citizens from other provinces or foreigners. In addition, on Phuket, tourism acts as a general driver of the island's development, attracting other types of tenants, from wealthy European retirees to young digital nomads. By reinvesting tourism profits, the island is creating offers to meet various market demands.
Choosing an Investment Object: Location
In terms of real estate investments, Thailand can be divided into three types of markets, with the economic profile of the location being primary and geography secondary.
The capital market, such as Bangkok, is highly developed and competitive. Attractive properties sell extremely quickly, so working with an experienced broker and searching for opportunities before construction begins is crucial. Price ranges can vary widely, with condominiums in the capital showing greater variation in class compared to Phuket.
Price Structure for Apartments from a Leading Developer:
- D-minus: $1000–1700 per sqm
- D: $1700–2300 per sqm
- C: $2300–4300 per sqm
- B: $4300–7100 per sqm
- A: $7100–11400 per sqm
- S: $11400 and above
On Phuket, this developer offers properties in segments from D to B, while in Bangkok, all categories are available.
Established Tourist Locations
Phuket and Pattaya have traditionally been the main developed tourist locations for real estate investments. However, by 2023, tourism has fully recovered only in Phuket, while Pattaya is still recovering from the crisis caused by COVID-19. The process has been slow due to a shortage of workers, changes in tourist demographics, limited flights, and the ongoing problem of Pattaya not having its own airport.
Pattaya has traditionally offered more affordable investment options, but sometimes at the expense of quality. With tourism still not at pre-crisis levels, cheap properties with lower quality are now considered a risk factor. Apartments in poorly located or poorly constructed condos were already difficult to rent or sell during the peak of tourism, and now it has become even harder.