In 2021, Thai real estate market declined noticeably due to several factors, primarily the COVID-19 pandemic. Recently, with potential recessions, global financial markets take a turn and that impacted Thailand real estate market. For this reason, consumers were taking longer time to decide and holding off on property purchases.
With that said, looking towards 2022, the Thailand real estate market is expected to recover rapidly. According to Dr. Sopon Pornchokchai, President of the Agency for Real Estate Affairs Co., Ltd., in 2022, newly launched development projects will grow by 15% – 20% and value will also increase by 10%. However, the average price of newly introduced units is likely to drop by -10%, considering there are no new launched luxurious mega projects in 2022.
As is to be expected, properties will be more expensive in central Bangkok and other-in demand locations. Rental properties in Bangkok, for example, are in higher demand for tourists and long-term residents. Similarly, a demand from local residents, wealthy foreigners and expats who are willing to purchase a luxury accommodation is rising in Koh Samui and Phuket
Property supply trends reflect consumers’ concerns over economic instability.
There are three-mega trends in residential real estate development in 2022.
Wellbeing
Residents are under development to support overall health and environmental wellbeing. Project developers are focusing on public spaces, pet-friendly, biophilic and universal design.
Smart living
Working from home seems to continue and potentially increases in demand. Consumers want a resident that supports living aspects and offers smart home technology.
Virtual connection
Online meetings and communication are globally accepted and practiced. Virtual connection will be part of everyday living and certainly enhance experience of users.
High-net-worth individuals are favouring Thailand’s property market nowadays because
- COVID-19 outbreak is under control in comparison to many other countries.
- Government visa and property incentives attract wealthy professional foreigners to the country.
- Thailand’s economy has a potential for living, property and business over the next years.
- Thailand is a business hub with easy access to neighbouring Asian countries with multiple airports and flights operating daily.
- Luxury property market is seen as relatively affordable with great value for money for buyers and investors.
Referring to DDproperty’s Thailand consumer sentiment study, 71% of Thai consumers show interest in buying property but have postponed buying a house and 39% plans to buy a property within the next one to two years. Financial instability created by COVID-19 is one of the challenges to invest in property as 63% of respondents had concerns over the property price, while 37% lacked confidence due to political instability. Looking at age ranges, 58% of millennials do not have a plan to live independently, away from their family home within this year. 49% want to be with and take care of their family, while 43% is under financial constraints.
Additionally, Mr. Wasan Kiangsiri, president of the Housing Business Association, mentioned that the fourth quarter of 2022 will be the right time for homebuyers to accelerate decisions as property prices have risen year-on-year, driven by land prices. The increase of interest rates by 0.25 percentage points remains minimal compared with the high interest rates several years ago, he said. The interest rates are in an upward trend and will not go back to that low again.
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