2023 Thailand Real Estate Market Outlook
Thailand's real estate market is expected to witness varying trends in different property sectors in 2023, influenced by factors such as shifting consumer behavior, government policies, and domestic tourism. Century 21, the global leader in real estate, provides valuable insights for homebuyers, investors, and sellers looking to navigate the market and make informed decisions.
Current Real Estate Market Landscape:
The real estate market has undergone a significant transformation due to the COVID-19 pandemic, which has altered our lifestyles, work patterns, and social interactions. Remote work has emerged as a major trend, resulting in increased demand for homes with dedicated office spaces and outdoor areas. Additionally, there is a growing preference for properties in suburban and rural areas, offering more space, affordability, and less population density.
Emerging Real Estate Markets:
As traditional real estate markets become saturated and expensive, investors are exploring new opportunities. Sustainable and eco-friendly communities have gained popularity, emphasizing green spaces, walking trails, and access to healthy food options. These communities provide a more sustainable and healthy living environment. Another emerging trend is the rising popularity of co-living spaces, offering affordable housing options for singles and young professionals through shared living arrangements.
Smart Home Technology and Sustainability:
The adoption of smart home technology and sustainable design features is gaining momentum. Homeowners are increasingly interested in energy-efficient homes that can help reduce utility bills and minimize their carbon footprint. Property developers are incorporating sustainable elements such as solar panels, rainwater harvesting systems, energy-efficient appliances, and smart home automation systems to meet this demand.
Sector-wise Market Trends in 2023:
1. Office Sector:
Demand for office space is expected to increase, driven by technology, e-commerce, and logistics companies. Vacancy rates are projected to decline from 9.8% in 2022 to 8.5% in 2023. Average rent is likely to rise by 1.5% year-on-year to THB 1,020 per sq m per month.
2. Retail Sector:
The shift to online shopping and changing consumer behavior pose challenges for the retail sector. The supply of new retail space is anticipated to decrease by 46% year-on-year to 270,000 sq m in 2023. The vacancy rate is expected to increase from 11.4% in 2022 to 12.5% in 2023. Average rent is projected to decrease by 1% year-on-year to THB 1,530 per sq m per month.
3. Industrial Sector:
The industrial sector is benefiting from the growth of e-commerce and logistics activities, supported by government policies promoting foreign investment and innovation. The supply of new industrial space is forecasted to increase by 13% year-on-year to 1.6 million sq m in 2023. The vacancy rate is expected to remain low at around 6%. Average rent is anticipated to increase by 2% year-on-year to THB 140 per sq m per month.
4. Hotel Sector:
The hotel sector's recovery is driven by domestic tourism in the post-pandemic scenario.
The supply of new hotel rooms is estimated to decrease by 35% year-on-year to around 7,000 rooms in 2023. The occupancy rate is projected to improve from 40% in 2022 to 55% in 2023. Average daily rate (ADR) is likely to increase by 4% year-on-year to THB 2,500.
5. Residential Condominium Sector:
The high-end segment of the residential condominium sector faces oversupply and weak demand issues. The supply of new condominium units is expected to decline by 23% year-on-year to around 50,000 units in 2023. Take-up rate (TUR) is forecasted to slightly improve from 42% in 2022 to 45% in 2023. Average selling price (ASP) is likely to decrease by 1% year-on-year to THB 120,000 per sq m.
6. Residential Land Sector:
The residential landed property sector demonstrates resilience and stability, driven by end-users seeking more space and privacy.
The supply of new landed property units is projected to increase by 7% year-on-year to around 30,000 units in 2023.
Take-up rate (TUR) is estimated to remain high at around 80%.
Average selling price (ASP) is anticipated to increase by 4% year-on-year to THB 4 million per unit.
Guidance for Buyers, Sellers, and Landlords:
Buyers should expect an increase in prices for single-detached houses, particularly those located near Skytrain stations on the outskirts of Bangkok. Sellers can benefit from selling properties in areas that experience price growth due to infrastructure development. Landlords may find opportunities in the rental market, with consumers postponing home purchases and showing increased demand for condominium rentals, especially near BTS stations.
Looking Ahead:
Century 21's comprehensive report provides valuable insights into the Thailand real estate market for 2023. While certain sectors may face challenges, others show potential for growth and stability. Staying updated on the latest market trends and embracing smart home technology and sustainable design features can position investors and industry professionals for success in the coming years. By leveraging the current market landscape and exploring emerging real estate markets, individuals can make informed decisions and capitalize on opportunities in the Thailand real estate market.