Thailand emerged as the most popular real estate market amongst ASEAN countries according to data from the Thai Statistics Authority. In comparison, the nearest South-East Asia country recorded 1.3 million properties sold.
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Great returns increase over time
Investing in real estate in Thailand can offer excellent returns thanks to the thriving tourism industry. The demand for properties during peak tourist seasons throughout the year makes it a thoughtful investment choice. Investing in Thai properties during these tourism seasons in Thailand can yield profits and a good return on investment.
One of the advantages of real estate investment is its ability to maintain its value and often even increase it. This leads to profits through resale or leasing which can amount to around 11% of the property’s value.
Thailand’s real estate market also shows promising growth potential. Throughout the years, the nation has consistently experienced expansion. Investment returns in Thailand’s real estate market tend to grow when the ownership’s long term since property values typically appreciate over time resulting in increased capital.
Additionally, investing in a country like Thailand offers a sense of security as there is solid demand for rentals. This ensures a stable additional income, from renting out the property.
Then it is important to consider how to make the most of your investment by either renting it out at a good yield rate or selling it for a higher price than what you originally paid. Use our rental yield calculator, follow our 14 tips for property investment, and browse condos for sale in Bangkok.
In this regard, we recommend seeking guidance from PropertySights Real Estate, we are well equipped to assist you throughout all phases of real estate investment in Thailand.
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Resilient economy and strong rental market
Countries around the world are pursuing investors in order to stimulate the local economy by injecting liquidity into one’s major infrastructure projects, but Thailand is notable from other countries with a unique resilient economy that encompasses a range of industries, including manufacturing, tourism, agriculture, and services.
The Land of Smile is rich in culture and geographical wealth, not only a travel destination for millions of tourists in a year, but also an important center for healthcare, agriculture, manufacturing, and tourism. It has a strong infrastructure for these types of expats and tourists living or visiting Thailand.
In addition, Thailand is also known for its rental market, which makes it an attractive option for foreigners real estate investors looking to earn income from their investments. With a growing influx of tourists, nomads, and expats coming in, investors have the opportunity to establish a source of income from their property investments.
Thailand has a reputation for stability and consistent growth, which makes it a solid choice for investors.
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Strategic location, infrastructure, and International Cooperation
Thailand’s development and global significance are greatly influenced by its location, infrastructure, and strong international collaborations. Thailand is often referred to as the “Gateway to Southeast Asia” because of its position within the region. It shares borders with four neighboring countries; Myanmar, Laos, Cambodia, and Malaysia.
Thailand boasts a developed network of roads, railways, ports, and airports that ensure connectivity. The capital city of Bangkok serves as an aviation hub in the region with two airports. These robust infrastructure systems facilitate the movement of goods and people, contributing significantly to growth.
As a founding member of the Association of Southeast Asian Nations (ASEAN), Thailand actively participates in this organization focused on strengthening cooperation, promoting political stability, and fostering cultural exchange among member states. ASEAN plays a role in shaping relations and driving economic integration within the region.
Among the advantages of real estate investment in Thailand, this strategic positioning naturally positions Thailand as a trade and logistics hub for mainland Southeast Asia.
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Thai Government support for the property market sector
One of the benefits of investing in real estate in Thailand is that the Thai government has placed emphasis on the real estate sector through various campaigns over the years such as utilizing incentives, like lowering property transfer fees and mortgage fees as a means to boost both the economy and the property market.
The main activities undertaken in this context include:
Beginning January 1, 2023, the revised property regulations have reduced transfer fees and mortgage fees, for units valued at 3 million baht or less. The fees will be lowered from 2% to 1% for transfer fees and from 1% to 0.01% for mortgage fees.
To encourage investment, the Thai government provides incentives such as tax privileges, land ownership rights, and promotional benefits in specific industries. These incentives are designed to make investing in Thailand more appealing and advantageous.
Foreigners and expats have been granted an exemption from paying value-added tax when purchasing real estate.
Under Thai law, foreign investors have the opportunity to obtain residency through an investment visa. This visa allows them, along with their spouse and children, to obtain residency in Thailand by purchasing a property from the developer.
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Solid possibility to obtain Thai residency
What increased Thailand’s popularity to be among the best countries in the South-East Asia for real estate investment, is linking the granting of Thai residency to purchasing a condominium worth $320,000, which was considered a strong catalyst, especially for foreigners who looking to settle down and retire in Thailand, to buy real estate in Thailand, even if this is accompanied by an increase in real estate prices in Thailand, which means that the demand for condominium in Thailand will remain strong despite all circumstances.
The effects of allowing the granting of Thai residency in exchange for buying a condominium by owning a property on the percentages of properties purchased with the aim of residency have appeared among many transactions of foreigners buying condominium in Thailand.
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Cheaper property prices compared to other countries
Real estate prices in Thailand are often considered affordable. In many other countries, the real estate prices of properties can soar, making it difficult for many people to attain their dream homes. However, in Thailand, you can often discover properties at a lower cost compared to major Western cities. Whether you have your eye on a seaside villa, a city center apartment, or a peaceful countryside getaway, Thailand offers a range of options that won’t strain your finances.
Here is a comparison of the prices for houses based on the average cost of a city center per square meter, an area expressed in Sterling Pound. This information is provided by Finder UK for your reference:
- Thailand real estate per sqm is: £2,934.16
- Hong-Kong real estate per sqm is: £24,364.03
- Switzerland real estate per sqm is: £13,067.67
- South Korea real estate per sqm is: £10,159.31
- United Kingdom real estate per sqm is: £4,455.54
- United States real estate per sqm is: £3,831.01
Source: Finder UK
Thailand’s property market offers options for a variety of budgets. It provides amenities and incentives that make investing in Thailand an opportunity. Moreover, Thailand’s captivating attractions, including its climate, thriving economy, vast real estate market, healthcare tourism, and a multitude of tourist spots and cultural sites, draw visitors from over the globe.
Considering all these factors, investing in Thailand for both residence and business purposes proves to be an ideal choice, in every aspect.
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Affordable cost of living for foreigners investors
Thailand attracts foreigners, with its advantage of having a significantly lower cost of living.
Living in Thailand offers an advantage when it comes to affordability. From enjoying meals at street food stalls to shopping at bustling markets, the daily expenses in Thailand are much lower compared to other countries. As a result, your money goes further, allowing you to enjoy a lifestyle without breaking the bank.
Finding housing is crucial for people, and in Thailand, you have various options that won’t put too much strain on your budget. Whether you’re looking for an apartment in the heart of Bangkok, a villa in Phuket, or a peaceful retreat in the countryside, there are choices available to fit every budget. The cost of renting or buying property in Thailand is noticeably cheaper than in other countries.
When it comes to public transportation options like taxis, buses, tuk-tuks, MRT, and the Skytrain in Bangkok, they are all reasonably priced. Moreover, fuel costs are considerably lower compared to other countries, making owning a private car more affordable.
Does property investment in Thailand hedged against inflation?
Yes, property investment in Thailand is hedged against inflation as the objective of rational property investors is not to maximize their returns but to minimize the risks associated with their investments. Among the risks they face, inflation has emerged as a concern due to its impact on the actual returns.
In Thailand, the consumer price index (CPI) serves as a proxy for measuring inflation. To better understand how to hedge against inflation, we break down the inflation rate into two components: expected inflation and unexpected inflation, to provide a method for defining protection against inflation.
When it comes to investors who operate in other currencies than Thai baht and bring their investment capital from outside the local market, high levels of inflation do not directly affect them when it comes to buying or renting properties. However, there are instances where high levels of inflation can be advantageous for these investors, in terms of purchasing power, making real estate more affordable when compared to the Thai baht.
Historically, real estate has been considered an investment asset and an effective way to hedge against inflation (see Le Moigne and La 2008).
