Out of the woods: Thai real estate on the path to redemption

The property market is poised for a rebound, driven by foreign investments and sustainable developments

Developers are optimistic about the market’s long-term potential, with several new projects in the pipeline. MarrySurg/Shutterstock

According to the Real Estate Information Center (REIC), the property market in Thailand is expected to rebound this year, with the Center revising its outlook due to improved economic conditions and the government’s economic stimulus measures. Its president, Atip Bijanonda, told the Bangkok Post that the property market should expand by three to five percent this year, compared to the previous estimate of two to four percent. 

Regardless, the REIC warned that the market still faces challenges such as rising construction costs, which could affect developers’ ability to complete projects on schedule. It also noted that the market is still adjusting to the new normal post-pandemic, with buyers and sellers taking a more cautious approach. 

Increased consumer confidence 

Yet, the property sector is hoping for a turnaround in 2023, with Thai PBS World citing the improved CCI (Consumer Confidence Index), which has continued to increase for six years straight. At present, the CCI is at 47.9, the highest in the past two decades, indicating the return of consumers’ confidence. 

The Thailand Consumer Sentiment Study conducted by DDproperty also uncovered similar sentiments from consumers, with 57 percent planning to purchase properties within the year, seven percent looking to rent, and 35 percent without definite plans for either. 

“There is a pent-up demand caused by the covid years and purchasing power is increasing due to a better performing national economy,” added Leong Choong Peng, an advisor for Mentabuild Limited, a consultant chartered surveyor, and a respected member of the PropertyGuru Thailand Property Awards judging panel. This year, he is expecting a mild increase in uptake for residential projects, particularly for mid-priced developments. 

Developers hopeful for recovery 

Developers, on the other hand, are optimistic about the market’s long-term potential, with several new projects in the pipeline. Among them are the Thai winners from the highly anticipated 2022 PropertyGuru Asia Property Awards Grand Final, such as the Best Landmark Mixed Use Development (Asia) titleholder One Bangkok by Frasers Property Holdings (Thailand) Co., Ltd. (FPHT), Best Condo Development (Asia) winner The Aspen Tree at The Forestias by Magnolia Quality Development Corporation Limited, and Best Waterfront Housing/Landed Development (Asia) victor Lake Legend Bangna-Suvarnabhumi by Hongkong Land and Property Perfect PC. 

Professor Sonthya Vanichvatana, Ph.D, MRICS, associate architect, chairperson of the Department of Real Estate, MSME School of Management and Economics, Assumption University, as well as another esteemed member of the judging panel, added: “Thai housing developers are good at finding markets for each company’s expertise. In the past year, there were more low-rise housing projects compared to 2021. However, for this year, housing developers are leaning towards condominium projects.” 

Related: Growing demand for homes greets return of the PropertyGuru Thailand Property Awards for 18th edition

Factors driving the upturn 

To further propel this momentum, the property trends that are likely to transpire this year include the growing popularity of sustainable and green developments, the increasing use of technology in property management, and the emergence of new investment models such as real estate investment trusts (REITs). 

Foreign investors are also expected to play a key role in buoying the property market, seeing as the recent government measures have made it easier for foreigners to buy property in Thailand. This, combined with the country’s low property prices compared to other major cities in the region, is expected to attract more foreign buyers in the coming years.  

In conclusion, the positive outlook for the Thai property market in 2023 is a promising sign that the industry is indeed on the path to redemption, with new investment models, foreign interest, and innovative sustainable developments leading the way, taking the market out of the woods and into a bright future. 

Know of award-worthy residential, commercial, or industrial projects in Thailand? Nominate them for the 18th annual PropertyGuru Thailand Property Awards on or before 16 June 2023. To know more, visit AsiaPropertyAwards.com/Award/Thailand/. 

Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].