Thailand real estate is poised for a revival by 2025

Thailand's real estate market is expected to revive by 2025

Thailand, the jewel of Southeast Asia, known for its picturesque beaches, rich culture and hospitality, is gearing up for a revival of its real estate market. After years of turbulence caused by the COVID-19 pandemic, experts are predicting significant growth in the industry by 2025. In this article, we look at the key factors, trends and prospects that will shape the future of Thailand's real estate market.

Recovery from the pandemic

The COVID-19 pandemic dealt a severe blow to Thailand's economy, including the real estate sector. However, thanks to effective government measures and the gradual lifting of restrictions, the market has begun to show signs of recovery. In 2021, there was a significant increase in foreign investment, especially from Chinese buyers, who accounted for more than 60% of international real estate sales.

Government support

The Bank of Thailand has taken a number of measures to stimulate the real estate market and support the economy as a whole. One key initiative was to increase the loan-to-value (LTV) ratio for mortgages to 100%. This measure allowed many potential buyers to access financing and helped to revitalize the housing market.

A shift in demand toward low-rise housing

During the pandemic, there was a shift in demand toward low-rise housing such as detached homes and townhouses. Consumers increasingly favored larger homes with their own outdoor spaces. This segment has shown resilience during the crisis and is expected to continue to grow in the coming years. Major developers such as Sansiri, Habitat Group and Supalai have been quick to respond to changing consumer preferences and shifted their focus from condominiums to low-rise housing. In 2021, landmark projects were launched in various price segments ranging from super luxury villas to affordable mid-range housing.

Growth Prospects

Experts forecast the total real estate market in Thailand to reach $154.51 billion in 2024 and $202.33 billion by 2029, representing an annual growth rate of 5.54%. These impressive figures demonstrate the sector's great potential and its attractiveness to investors. Thailand's real estate market is characterized by high concentration and dominance of large developers. Key players include Sansiri, Property Perfect, Pruksa Holding, Supalai Company Limited and Ananda Development. These industry giants have extensive resources, experience and the ability to adapt quickly to the changing needs of the market. In recent years, there has been a trend towards market consolidation, with smaller real estate developers being absorbed or merged with larger players. This allows the consolidated companies to increase efficiency, access new markets and offer a wider range of products.

Attractiveness for foreign investment

Thailand has traditionally been an attractive destination for foreign real estate investment. A favorable investment climate, stable political situation and developed infrastructure make the country attractive to buyers from China, Singapore, Hong Kong and other regions. With the easing of pandemic restrictions, an inflow of new investments is expected, especially in the luxury real estate and resort segments. Developers are actively working on new projects aimed at meeting the demand from affluent foreign buyers.

Infrastructure development and new projects

The Thai government is investing heavily in infrastructure development, which will have a positive impact on the growth of the real estate market. The construction of new transportation networks such as high-speed railroads and metro extensions will improve connectivity and mobility, opening up new prospects for development. There are also ambitious projects underway, such as the development of the Eastern Economic Corridor (EEC), a new center for innovation, trade and investment. These initiatives will attract new residents and businesses, stimulating demand for housing and commercial real estate.

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Conclusions

As the economy recovers and pandemic restrictions are lifted, Thailand's real estate market is gearing up for a period of revival. Experts are optimistic about the industry's prospects, predicting significant growth by 2025. Thanks to government support, attractiveness to foreign investment, infrastructure development and changing consumer preferences, Thailand's real estate sector is showing its resilience and readiness to reach new heights. Nevertheless, investors and developers should keep a close eye on developments and be prepared for potential challenges and changes in this dynamic market.

• Growing demand for smart homes
  Buyers are increasingly looking not just for housing, but for full-fledged smart homes equipped with state-of-the-art technology and automation systems. Integrated solutions for lighting, climate, security and multimedia control are becoming a must-have for new projects. Leading real estate developers such as Sansiri and Ananda are already actively incorporating smart technologies in their projects. The demand for such solutions is only expected to grow in the coming years.
• Focus on environmental friendliness and sustainability
  Environmental concerns and sustainability principles are becoming increasingly important to real estate buyers. Real estate developers are forced to adapt to this trend by incorporating green technologies and solutions into their projects. The use of solar panels, rainwater harvesting systems, energy efficient materials and landscaping that takes into account the local ecosystem are just a few examples of the green approach that will dominate Thailand's real estate market.
• Growing interest in mixed-use projects
  The concept of all-in-one projects combining residential, commercial and entertainment areas is gaining popularity. Buyers appreciate the convenience of having everything they need within walking distance — stores, restaurants, fitness centers and other infrastructure. Developers are increasingly choosing the multifunctional format when developing new projects, creating full-fledged mini-cities within one complex. Such mixed-use projects allow to optimize the use of space and increase attractiveness for potential buyers.
• Growth of online real estate sales
  Digitalization has also affected the real estate industry. More and more home purchase transactions are being made using online tools and platforms. Pandemonium has only accelerated this process, prompting real estate developers to adopt digital solutions more actively. Virtual tours, 3D visualization of properties, online signing of documents — all these technologies are becoming the norm for today's real estate market. It is expected that by 2025 the share of online sales in the residential real estate segment will grow significantly.
• Demand for ready-made properties
  Amid economic instability, many buyers favored ready-made properties, avoiding the risks associated with stage construction. This trend is likely to continue in the coming years, influencing developers' strategies. Developers will pay more attention to bringing ready-made projects or properties at the final stage of construction to the market. This will help meet the demand of more cautious buyers and secure their investments. However, at the same time, promising projects at the initial stages will be offered for those who are ready to take risks, counting on lower prices and potential profits from the growth in value.
• Focus on affordable housing
  Despite the growing interest in premium segments, the demand for affordable housing for the middle class remains consistently high. This niche is one of the most promising for real estate developers in terms of sales volumes and supply absorption. Major players such as Pruksa Holding and Supalai are expected to continue to aggressively develop affordable housing projects in Bangkok's suburbs and other major cities. This segment will continue to be a key growth driver for the market as a whole.
• Flexible financing schemes
  To stimulate sales, developers will offer increasingly flexible and favorable financing schemes for real estate purchases. In addition to traditional mortgages, installments, interest-free loans, co-ownership schemes and other innovative solutions may be applied. The aim is to reduce the financial burden on buyers and open up access to real estate to a wider range of the population. Such financial instruments will be especially in demand in the affordable and mid-price housing segments.
• Tourist real estate development
  Thailand is a world-renowned tourist destination that receives millions of visitors every year. With the recovery of the tourism industry after the pandemic, demand for investment real estate in resort areas is expected to grow. In addition to traditional villas and apartments, complexes with hotel services and rental management will gain popularity. Investors will have the opportunity to rent out their properties, receiving income from the tourist flow. The attractiveness of resort areas such as Phuket, Samui and new projects on the Gulf Islands will only grow due to the development of infrastructure and the recovery of tourist traffic.

Thus, Thailand's real estate market is poised for a true renaissance by 2025. Thanks to a combination of positive factors and innovative trends, the sector will be able to realize its huge potential and attract both domestic and foreign investors. However, the key to success will be the ability of developers to adapt quickly to rapidly changing market realities and consumer preferences.