Data: In H1 2023, demand for real estate in Thailand has grown among investors from China, USA, and European countries
Official data released by the Government Housing Bank (GHB) in June 2023 indicates a significant increase in the purchase of apartments in Thailand by foreigners in Q1 2023. Compared to Q1 2022, there has been a 79.2% rise in the number of units bought, with a total of 3,775 apartments purchased. The value of these purchases has also risen by an impressive 67.6%, amounting to 17.1 billion Thai baht by the end of Q1 2023.
It is important to note that Thai government statistics regarding the market trends are likely to reflect a slight delay due to GHB providing data on the registration of ownership, while many foreign buyers invest in properties under construction. For instance, the experts at Tranio have been observing a sharp surge in foreign demand for real estate in Thailand over the past year, and this tendency is now supported by the official data.
The demand for Asian destinations among our clients grew noticeably in the spring of 2022, when many Russians were looking for alternatives to investing in real estate in Europe due to the geopolitical situation and the complicated money transfer procedures. Although some investors still remain committed to traditionally popular destinations in Europe, such as Greece, France, and Cyprus, a major part of our clients have redirected their focus to Middle Eastern and Asian countries: Turkey, the UAE, Thailand, and Indonesia.
Our analysts and official data both show a high level of investor activity in Turkey even against the backdrop of the recent earthquake; however, the growth trend on this market has already slowed down. Meanwhile, the activity in the Asian real estate markets is still gaining momentum amid the recovery of tourism after the pandemic and an influx of investments from China, the USA, and European countries.
According to GHB, in Q1 2023, there has been an increase in the number of deals for apartments in Thailand among buyers from China, Russia, the USA, and the UK. Specifically, the number of deals by Chinese buyers rose to 1,747 from 949 deals in the same period last year.
The number of deals by Russian buyers increased to 387 from 134 deals, while the number of deals by American buyers went up to 156 from 114 deals, and those by British buyers increased to 146 from 91 deals. While the Chinese buyers remain the leading investor group in Thai real estate, Russians have shown the highest relative increase in deals, recording a 188% surge, or 2.8 times the number of transactions in the comparable period.
Apartment purchases in Thailand by foreigners in Q1 2023
No. | Buyer's nationality | Number of apartments purchased | Total cost | Total area, m² | Average area, m² | Average apartment cost |
1 | China | 1,747 | $241,588,084 | 67,812 | 38.80 | $138,623 |
2 | Russia | 387 | $40,230,271 | 16,455 | 42.50 | $103,230 |
3 | USA | 156 | $19,259,800 | 8,247 | 52.90 | $123,876 |
4 | UK | 146 | $20,734,516 | 8,071 | 55.30 | $141,573 |
5 | Germany | 131 | $18,021,038 | 7,314 | 55.80 | $138,623 |
According to Tranio, demand for Thai real estate continues to grow in the current period. In H1 2023, the number of client’s requests for property purchases in Thailand increased by 72% compared to H1 2022. Meanwhile, the median budget rose to 177,000 US dollars, up 5% from 168,000 US dollars last year. Investment is now the main motive for purchases: 52% of clients want to buy real estate in Thailand this year for vacation and rental purposes (compared to 42% in the previous year); while 10% are thinking about purchasing real estate exclusively for rent (compared to 2% previously). Only 15% of clients who are considering buying property in Thailand in 2023 plan to use it for permanent residence and another 11% of clients are intent on using it for seasonal vacation. This reflects a significant change in demand structure over the past year: previously, 10% of clients were interested in Thai real estate for relocation, while a majority of 38% were interested in seasonal vacation.
It is worth noting that the average parameters of properties in demand among Chinese buyers have barely changed over the past year. According to GHB statistics, in Q1 2023, investors from China purchased apartments with an average area of 38.8 sq. metres, while in Q1 2022 the average area was 39.4 sq. metres. On the other hand, among Russian buyers, who are second in the ranking of overseas real estate buyers in Thailand, the average area of purchased properties increased to 42.5 sq. metres in Q1 2023, up from 35.5 sq. metres in Q1 2022.
In previous years, buyers in the mass market segment more often opted for small condos and apartments located in popular resorts in Thailand where they could come on vacation during the winter season. In the premium and luxury segments, villas on islands surrounded by nature, such as in exclusive communities in Phuket and Koh Samui, were very popular. Now, investment demand is picking up across all segments: both more affordable condos in the mass market and private villas or apartments in resort complexes with rich infrastructure are in high demand.
The advantages of Phuket, which our clients appreciate now, include a wide selection of options in different price ranges: from 110,000 US dollars in developing locations to 330,000 US dollars in developed resorts with premium services. In addition, new buildings in Phuket in all segments of the market provide good increase in value during the construction stage (approx. 10–15% per annum) as well as high rental income later (approx. 7–8% per annum on average).
According to the H1 2023 results, experts at Tranio note an increase in clients’ interest in other Asian markets as well. In particular, the real estate market in Indonesia is experiencing rapid growth, with a 47% increase in the number of property purchase requests and a 22% increase in the median budget (from 180,000 to 220,000 US dollars). In Indonesia, investor demand is focused primarily on resort locations of the Bali Island, where 63% of clients choose properties for vacation and rental purposes. Currently, the interest of foreign investors in the Indonesian market is being driven by visa reforms announced by the authorities, which will allow professionals from IT, healthcare and other targeted sectors to obtain a residence permit under a simplified scheme.
Demand for real estate in Vietnam among overseas property buyers is growing steadily in recent years as well, albeit at a slower pace. According to Tranio’s data, in H1 2023, the number of requests for properties in this country increased by 25%, while the median budget grew by 5%, from 152,000 to 160,000 US dollars. Vietnam remains one of the most affordable resort destinations in Asia in terms of both the cost of living and the starting property prices from 77,000 US dollars. The median budget in Tranio’s statistics tends to be higher as our clients in this country are more likely to consider private villas in the 200,000 to 300,000 US dollars price range.
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