Despite a flagging global economy, and a few upheavals of their own, Thailand still boasts one of the most vibrant and interesting real estate markets in the world. A quick glance at Property Guru or another real estate search index will reveal thousands of properties, developments, and land for sale throughout the country.
As the market settles out after a few years of major ups and downs, Thailand’s property news for the upcoming year paints quite an interesting picture.
The Property Market is Prooving its Long Term Resilience
The last few years have been tumultuous ones for Thailand, thanks to a sudden and major change of power in 2014 and the temporary imposition of martial law. The markets bounced back after that upheaval, and the tragic explosion at the Erawan Shrine in August proves that resiliency wasn’t just a fluke. Despite a brief lag in foreign investment and tourism, Thai real estate continues to surprise analysts with its ability to recover from any setback.
“We were quite worried in the week afterwards,” James Pitchon, an expert real estate consultant, told the South China Morning Post.” But the overall state of the economy is a far more important issue driving the performance of the property market rather than a single tragic event.”
That’s characteristic of a market that has posted rising home prices every year since 2008, in a flagging global economy that has been disastrous for many other countries.
The price of a single-family home has risen between one and five percent every year for eight years, and condominiums and townhouses are posting even faster growth: between five and twelve percent annually.
Life in Thailand hasn’t always been easy in recent years, but the country’s economic stability is there where it counts.
The Luxury Market is Still Growing
Part of the Thai real estate market’s resilience is due to its domestic drive. While the market does bring in some foreign capital, most of the low and midrange properties still trade in the hands of Thai citizens.
Multiple property laws still on the books place heavy restrictions on foreigners’ ability to buy and lease property, and that keeps the bulk of trading properties domestic.
It also means that foreign investment capital is concentrated in one place: the luxury market, where most of the properties are over US$300,000, or around ten million baht.
After a few stagnant years, luxury property in Thailand is on the rise again. Mansion Global, analysts who specialize in luxury properties around the world, call Thailand a market on the verge: a luxury area with huge potential that is only now being tapped.
Thai tourism is growing at an astonishing rate, with annual increases as much as 25 percent, and that growth brings in luxury buyers. In 2015 53 new luxury villas became available in Phuket, one of the top luxe vacation spots, after 2013 and 2014 closed with no new properties.
What does this mean for the Thai market as a whole? For one thing, more tourism dollars, giving a boost to an already substantial industry, especially in Bangkok and beautiful Phuket.
It also means that there may be a shift in the future: most properties are still domestic holdings, but the foreign investments in luxury villas could tip the balance as more and more foreign currency enters the market. Whatever the outcome, the last stagnant area of Thai real estate is seeing growth again, with no signs of slowing down.
Mass Transit Means a Shot in the Arm
2016 is likely to be a year of major development for Bangkok: the city will become the hub for an ambitious project called the Pan Asia Railway Network, intended to connect all the Southeast Asian nations over the coming years. That’s big news for trade and industry in Thailand’s capitol city, where projections already called for seven to ten percent annual growth in real estate over the next ten years.
The government is making huge investments in infrastructure, and developers are planning accordingly. Major developers have announced dozens of development projects in the greater Bangkok area, with a total worth greater than Bt250 billion.
In addition to the Pan Asia Railway Network, Thailand’s government plans to invest in more rail ways and motorways, and ten more mass transit rail routes servicing Bangkok and the surrounding area.
Optimism Abounds for the Year Ahead
With both domestic demand and residential pricing on the rise, major developers are expecting record profits in 2016 from the residential market alone. In fact, wherever you look and whatever analysist you ask, you’ll find a distinctly sunny outlook as we move forward in 2016. This is likely to be a record year for investment and development in Thailand.