Bangkok’s housing market is growing today. According to the Kasikornbank Research Center report, sales are expected to decline by 7.8% in 2023 compared to last year. The effect of delayed demand from the pandemic in Bangkok has passed, and real estate sales are decreasing.
This situation forces banks and developers to look for other ways to revive demand in the Bangkok real estate market, including by reducing government fees for mortgages with a property price of less than 3,000,000 baht (£68281).
This and some positive forecasts from experts who expected growth in 2024 encourage investors and consumers to purchase real estate in Bangkok. Obviously, it is more profitable to buy local properties during an economic downturn than during an upturn.
Let’s talk about the key features of this market, trends, as well as the advantages and disadvantages of buying property in Thailand for expats.
What are the benefits of real estate in Bangkok?
Being the capital, Bangkok has a modern and developed infrastructure. Apparently, that’s not all. Here are the following facts:
- The metro. The underground BTS Skytrain and MRT railway lines connect developed areas and make travel around the city quick and easy. At the same time, the construction is underway covering other areas. As a consequence, this will increase the cost of housing in these localities.
- The constant growth of construction standards. In an effort to attract as many foreign buyers as possible, developers improve the quality of their projects by adding more advanced amenities, such as modern gyms, spacious pools, saunas and recreation areas.
- An increase in the tourist flow. Bangkok is one of the most visited cities not only in Thailand, but also in Southeast Asia. This means that the Thai capital offers stable demand for local properties, including rental. As a result, this ensures its investment appeal.
What are the shortcomings of Bangkok properties?
There are two disadvantages. The first one is individual, typical for this city. The second one is common to all Thai real estate.
A common downside is the limited access of foreigners to local housing projects. For example, expats have almost no opportunity to buy land in Thailand. There is one exception for large investments, but it hardly works in practice. Consequently, this leads to difficulties when buying houses, villas and townhouses in Thailand: third-country nationals can own them, but without the land on which they are located. They have to rent it separately.
There are also restrictions for apartments. You can purchase housing only in condominiums, and only if no more than 49% of foreigners live there. This means that you should check:
- The legal status of an apartment building. You cannot visually distinguish an ordinary house from a condo. The difference is only on paper, but you can purchase a home in one case, and you cannot in the other.
- Compliance with the quota for foreigners. Expats can easily buy apartments in off-plan houses. Then you will either have to make a deal with foreigners, or look for a house where the total number of overseas residents is less than 49%.
The rules listed above are common to the whole country. As for Bangkok properties, its main drawback is the higher price than in other cities. For comparison, you can become a happy owner in Bangkok by buying a property for 195,615 baht (£4452) per 1 sq. m. However, real estate outside the city will cost 89,472 (£2036) per 1 sq. m.
In Chiang Mai, a property for 1 sq. m. will cost you 60,600 baht (£1379), and outside it – 33,259 baht (£756). If you decide to buy a property in Pattaya, it will cost you 70,750 baht (£1610.31) per 1 sq. m, it is cheaper outside of this place – 38,000 baht (£86.49) per 1 sq. m. If you want to settle in a new apartment in Phuket, you will have to pay 101,250 baht (£2304.50) per 1 sq. m, and the price outside the city will be lower – 67,000 baht (£152.50).
As you can see, the cost of housing in Bangkok is on average higher than in other cities. However, it is cheaper than real estate in some other developed ASEAN countries. For example, the cost of 1 sq. m in central Singapore is 27,831 local dollars (£16,552), and outside the centre — 16,360 local dollars (£9730.36).
Bangkok’s real estate features
The residential real estate market in Thailand has its own characteristics. The main one is the difference in the legal status of an apartment building and a condominium, as mentioned above. However, there are other interesting nuances:
- Most apartments and houses either do not have a kitchen, or have a so-called Thai one. It is completely different from its Western counterparts. A Thai kitchen is a small island at the entrance or on the balcony. It includes a stove, sink and a cupboard for storing food. As a rule, there is a refrigerator in a separate room. Thais cook at home rarely because of the heat, so they do not need either ovens or microwaves. Real estate in Thailand is not gasified, so the stoves are powered by electricity or a gas cylinder. However, many off-plan houses in Bangkok have standard Western kitchens. The new property is more advanced than the one built 15-20 years ago. However, it is unlikely that you will find an oven and refrigerator in it. Although, you can install them for a fee.
- Studying the ads, you may come across an offer to buy a so-called home office. This is a so-called detached house in Bangkok, which can be used for commercial purposes. You can live and work in a home office at the same time.
- Detached houses in Bangkok are extremely expensive, so townhouses are much more common here. They are also called “a row of houses” because they are a chain of properties connected to each other by one or two walls.
In a nutshell
The demand for residential real estate in Bangkok in 2023 is less than in 2022. This is largely due to the fact that the previous period was driven by delayed demand after the pandemic, but the situation has stabilised. At the same time, some experts predict that the situation will change soon. Consequently, sales and prices will rise in early 2024.
However, if the investment appeal of Bangkok properties may raise some questions, this period is considered favourable for buying your own home. The market is not overheated, which means that there are many offers at affordable prices.
You can make a beneficial deal to buy a property in Thailand
Nevertheless, before you make a deal, you should get acquainted with the local peculiarities. You can this with the help of professionals. Thailand-Real.Estate offers you such an opportunity. Experts will share with you not only information about the best housing and choose the most suitable one for you, but also provide you with their in-depth knowledge, including about the features of the Thai market and some restrictions of local legislation for overseas real estate hunters.
In a nutshell, they can purchase apartments in full ownership only if they comply with the quota for expat accommodation. Foreigners can acquire houses without land, and apartments are only available on long-term lease.