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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 66.2, which is a decent score.
Thailand's relative stability today can be attributed to its constitutional monarchy, which provides a unifying national identity and continuity, alongside a robust tourism-driven economy that supports growth and development. Additionally, the military's influential role in politics, often stepping in during times of crisis, has contributed to maintaining order and preventing prolonged political unrest.
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 2024, grow by 2.7%, which indicates the country is heaidng in the right direction. As for 2025, the experts say 2.9%.
Besides that, the economy will keep growing since Thailand's economy is expected to increase by 13.1% during the next 5 years, resulting in an average GDP growth rate of 2.6%.
The expected sustainable growth rate in Thailand indicates a stable and growing economy, which can lead to increased demand for real estate and potentially higher property values. For an investor, this means a better chance of earning a good return on their investment as the market remains strong and attractive.
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 -3 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 minimal Business Confidence Index (BCI) score should not deter individuals from exploring property investments in Thailand. Rather, it typically represents a temporary phase of uncertainty or caution within the business sector, which is a normal aspect of economic cycles. Importantly, historical trends show that periods of low BCI scores are often succeeded by substantial growth, as businesses adjust, invest, and seize 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 expected to be minimal
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 1.0%, which gives us an average yearly increase of 0.2%.
This data shows that Thailand will likely experience almost no inflation. If you buy a property now, you may experience lower appreciation potential and reduced returns on investment.
Thailand proposes 99-year leases and increasing foreign condo ownership to 75%
Positive
In 2024, Thailand proposed changes to its property ownership laws to attract foreign investment and stimulate the real estate market.
Key proposals include raising the foreign ownership cap in condominiums from 49% to 75%, potentially boosting demand in areas like Bangkok, Phuket, and Pattaya.
However, Thai nationals would still control condominium regulations, limiting foreigners' influence.
The government also plans to extend land leases from 30 to 99 years, offering greater security to foreign investors and potentially reducing development costs. This could make urban properties more affordable and attractive to both locals and foreigners.
These reforms are part of broader economic stimulus measures, but they're still under review. Public debate has emerged, with concerns about potential negative impacts on Thai citizens. The government has indicated it could introduce further regulations to address these concerns.
If implemented, these changes could significantly shape Thailand's property market by increasing foreign demand, while also sparking discussions on local control and affordability.
Is it a good time to buy real estate in Thailand then?
Let's wrap things up!
Thailand is currently a relatively stable country, which is always a good sign for potential property buyers. Stability often translates to a more predictable market, where you can make informed decisions without worrying too much about sudden political or economic upheavals. This kind of environment is ideal for property investment, as it allows you to plan for the long term with a bit more confidence.
Looking ahead, Thailand's economy is expected to grow by 13.1% over the next five years, averaging a GDP growth rate of 2.6% annually. This sustainable growth suggests a stable and expanding economy, which can lead to increased demand for real estate. As the economy strengthens, property values are likely to rise, offering investors a good chance of earning a solid return on their investment. A growing economy often means more people looking to buy or rent, which can make the real estate market even more attractive.
Despite the fact that Thailand's population is declining and facing economic challenges, house prices continue to rise month after month. This trend indicates a resilient real estate market that could be appealing to investors. Even with a shrinking population, the demand for property remains strong, possibly due to foreign interest or urbanization trends. This ongoing increase in property prices suggests that buying a property now could be a smart move, as values are likely to continue climbing.
Moreover, rental properties in Thailand offer gross rental yields ranging from 1.5% to 4.2%, according to Numbeo. While these yields might not be the highest globally, they still present a reasonable return, especially in a stable and growing economy. Additionally, with minimal inflation expected, the purchasing power of your rental income is less likely to be eroded over time. This combination of factors makes 2025 a potentially good time to consider investing in Thai real estate.
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.
-Will real estate prices go up 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.