Is it a good time to buy a property in Thailand in 2024?

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Everything you need to know is included in our Thailand Property Pack

Are you thinking of investing in the Kingdom of Smiles? Are you questioning whether now is the best time to proceed?

Market timing is a topic that elicits various opinions from people. Your childhood friend who lives in Phuket might suggest that now is the opportune time to buy, whereas your Thai wife might advise you to exercise a bit more patience before making a decision.

At BambooRoutes, when we create articles or update our pack of documents related to the real estate market in Thailand, we trust facts and data, not opinions or rumors.

We have carefully gathered and analyzed official reports and government website statistics. Using this information, we have created a reliable database. Here's what we found that can help you decide whether it's a good time to buy real estate in Thailand.

Ready? Let's go!

How is the property market in Thailand currently?

Thailand is, today, a relatively stable country

Neutral

Stability is a necessary condition when investing in real estate because it greatly influences the success of your investments. It is an information you need as a foreigner looking to buy a property in Thailand.

In recent times, Thailand has achieved a certain level of stability. The last Fragile State Index reported for this country is 70, which is a decent score.

Thailand has a long history of political stability, and its economy has been growing steadily for decades, creating a strong foundation for its current stability. Additionally, the Thai government has implemented a number of policies to address inequality and strengthen its democratic institutions, which has helped to further solidify its stability.

Now, let's examine additional data to determine if it's the right time to invest in property in this country.

Thailand is poised for strong growth

Positive

Before buying a property, look at the performance of the country's economy.

Based on the IMF's outlook, Thailand will, in 2023, grow by 3.4%, which indicates the country is heaidng in the right direction. Concerning 2024, the experts say 3.6%.

Besides that, the economy will keep growing since Thailand's economy is expected to increase by 15.1% during the next 5 years, resulting in an average GDP growth rate of 3%.

The expected sustainable growth rate in Thailand is a good thing for someone who wants to invest in real estate because it indicates that the country's economy is likely to remain stable, and that the value of real estate investments is likely to increase over time.

However, there are other indicators to watch.

Thai business owners have a neutral outlook towards market conditions

Neutral

How do the people of Thailand view their economy? The GDP forecast alone does not provide a complete understanding. Fortunately, in Thailand there is an official metric that is regularly reported. We're lucky because this isn't true for every country.

Based on surveys and assessments of business leaders, the Business Consumer Index (BCI) is a metric used to assess their confidence in the current and future economic conditions.

According to the Bank of Thailand's data, the latest Business Confidence Index value is 0 for Thailand. It is definitely a small score.

There hasn't been significant change, considering that the BCI score, 12 months ago, registered at -1.

A weak Business Confidence Index (BCI) score should not discourage individuals from considering property investments in Thailand. Instead, it often signifies a temporary phase of uncertainty or caution within the business sector, which is a natural part of economic cycles. Notably, historical patterns indicate that periods of low BCI scores are frequently followed by significant growth, as businesses adapt, invest, and capitalize on emerging opportunities.

House prices in Thailand keep increasing, month after month

Positive

Thailand's home prices have increased by 16.1% in 5 years according to Bank Of Thailand.

It means that if you had bought a condo in Bangkok for $450,000 five years ago, then it would now be worth around $523,000.

These days, house prices are increasing, however the growth is rather slow.

The gradual growth seen in Thailand's housing market can be seen as a good sign and promising for people looking for a safe investment opportunity. It suggests stability and predictability in the market, which can be appealing for those who prioritize long-term and secure investments.

You can find a more detailed analysis of the real estate prices in our property pack for Thailand.

Everything you need to know is included in our Thailand Property Pack

Thailand's population is declining and getting poorer

Negative

When you buy real estate, it's crucial to think about population growth and GDP per capita, since:

• a growing population means more people needing homes
• a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)

In Thailand, the average GDP per capita has changed by -0.9% over the last 5 years. It's an alarming number.

Rental yields are not really interesting in Thailand

Neutral

Rental yield is a common factor considered in real estate investing.

It's the annual rental income of a property divided by its price. For example, if a Thai property is purchased for 3,000,000 THB and generates 120,000 THB in annual rental income, the rental yield would be 120,000 / 3,000,000 = 4%

According to Numbeo, rental properties in Thailand offer gross rental yields ranging from 1.5% and 4.2%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Thailand.

It's very minimal.

Everything you need to know is included in our Thailand Property Pack

In Thailand, inflation is projected to remain moderate

Neutral

Inflation is when your money buys less than it used to.

It's when your pad krapao costs 120 THB instead of 90 THB a couple of years ago.

If you're considering investing in a property, high inflation can offer you several advantages:

• Property values have a tendency to increase over time, leading to potential capital appreciation.
• Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
• Inflation reduces the real value of debt, making mortgage payments more affordable.
• Real estate can act as a hedge against inflation, effectively preserving the value of the investment.
• Diversifying your portfolio with real estate provides stability during periods of inflation.
• Tax advantages, such as depreciation deductions, can help offset the impact of inflation.

Based on the IMF's outlook, over the next 5 years, Thailand will have an inflation rate of 9.0%, which gives us an average yearly increase of 1.8%.

This data shows that Thailand might experience inflation soon, so it's worth thinking about buying property now.

Is it a good time to buy real estate in Thailand then?

Let's wrap things up!

Considering the available indicators, 2024 presents a potentially advantageous moment for property investment in Thailand. The country's promising economic outlook positions it for strong growth, creating an environment where property values may appreciate over time. The consistent month-to-month increase in house prices underscores the upward trajectory of the real estate market, suggesting the potential for favorable returns on property investments.

Thailand's relative stability is a neutral factor that enhances the appeal of property investment. A stable political and social environment can contribute to a secure investment atmosphere, reassuring potential buyers about the safety of their assets. Additionally, while Thai business owners hold a neutral outlook towards market conditions, the overall economic growth and positive housing market trends could offer a counterbalance, potentially bolstering investor confidence.

However, it's essential to note that rental yields in Thailand are not particularly enticing. Investors seeking immediate income from their properties might find the rental market less lucrative. Nevertheless, the steady growth in house prices could offset the relatively lower rental yields, making property investment an attractive option for those prioritizing long-term value appreciation.

Amid these factors, it's important to consider the projected moderate inflation and the declining, less affluent population in Thailand. While these aspects might have some impact on the overall economy, the prevailing favorable signals such as growth potential and increasing house prices might outweigh the negative signals, potentially making 2024 a favorable year to explore property investment opportunities in Thailand.

In summary, the convergence of Thailand's growth potential, rising house prices, stability, and positive market trends could make 2024 a strategically advantageous time to enter the Thai property market. Investors should carefully assess their objectives and risk tolerance against these signals to make informed decisions aligned with their financial goals.

We wish this article has been of help!. If you need to know more, you can check our our pack of documents related to the real estate market in Thailand.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.