Why investing in Thai properties?
There are numerous good reasons to invest in Thailand property. The country has shown strong and steady growth in recent years and looks set to continue that trend. House and land prices are generally on the rise, as are rents, and this presents some interesting property investment opportunities in the market.
Plus, of course, Thailand is a great place to live and many people will find their dream home at an affordable price in the country.
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Trends of the Thai economy
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Investing in Thailand for foreigners
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Insights about the property market in Thailand
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What about the market in Koh Samui?
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The return on investment on Thai properties
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A country in consistent development
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Buy to let: another way to profit from property investment in Thailand
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Trends of the Thai economy
Thailand’s economy has seen strong growth in steady years and is one of the largest economies in the region.
Indeed, the country was ranked 2nd in terms of GDP in ASEAN in 2019, with the much larger Indonesia taking the top spot. This is largely because Thailand is very well situated to do trade in the region, and has modern infrastructure including seaports, airports, and sophisticated road and rail network systems that are conducive to business.
Thailand is not an expensive country to live in, coming in at 16th place in Asia in 2018. However, the actual cost varies considerably from person to person. For example, if you are OK with the delicious street food, which costs around 1.50 USD/meal, you can live very cheaply indeed. If you like to eat Western-style food, however, then you will likely find yourself paying at least five times that amount.
Investing in Thailand for foreigners
When it comes to business and property investments, Thailand is a world of opportunities that has seen interest from investors all over the world.
If you are planning on investing in a home of your own, then you will be able to find luxury homes at relatively affordable prices. As is to be expected, properties will be more expensive in central Bangkok and other in-demand locations.
In cities like Bangkok, rental properties are in high demand from tourists and from long term residents. The same goes for islands like Koh Samui, with property in demand from local residents, overseas tourists, Thais, and expats who want a luxury getaway from the mainland.
Just outside of Bangkok you will find a vast area of sprawling factories and warehouses, all of which are conveniently located close to seaports, airports, and the road and rail network. Affordable labor also helps ensure manufacturing and doing business is affordable. There is also no shortage of office space and other facilities and this also helps make it easier to do business.
If you’re interested in real estate investment in Thailand, have a look at our dedicated article, how to buy a property in Thailand as a foreigner.
Insights about the property market in Thailand
The Thailand housing price index had been gradually rising month on month, until relatively recently. This is partly down to the global economic slowdown and competition between construction companies creating a price-war. A drop in visitors to the country has also caused the property market to be impacted because there are fewer foreign buyers, particularly those from China. The prices seem set to continue to drop before an anticipated recovery in 2022.
While this does not read well for some, it reads very well for people wanting to invest in Thailand as properties become more affordable and present more alluring ROI’s.
Regardless of prevailing economic factors, average property prices in Thailand are considerably lower than those in the countries of potential investors. Below is a brief comparison of current houses prices and prices in other parts of the world (the prices given are the average price for properties that cover 120 square meters):
- Thailand: $5,266
- Honk Kong: $28,570
- United States: $17,191
- United Kingdom: $21,179
What about the market in Koh Samui?
One popular location to invest in Thailand is Koh Samui. Samui is not a large island and there are restrictions on how tall buildings can be, along with a suspension on new condo licenses. This increases competition for property and this competition will continue to drive up the prices.
Understandably, the best properties on the island are those locations with easy access to the beaches and sea view. With more people purchasing apartments, houses or villas in these locations, the prices will increase. This makes Koh Samui one of Thailand’s hottest property markets when it comes to investing in Thailand for foreigners.
If you’re interested in the real estate market in the island, have a look at our dedicated article, why investing in Koh Samui.
The return on investment on Thai properties
If you want to invest in Thailand property as a financial investment, you will want to see a return on your investment.
This makes Thailand a good choice because the country has seen a steady increase in property prices over the years. Demand for property in the country remains strong from both Thais and overseas investors.
A country in consistent development
The country already has a sophisticated road network with connections to main commercial and industrial centers. Even central Bangkok’s notorious traffic is being addressed with help from the city’s transport system. This is with help from the SkyTrain and the underground networks which interconnect with each other.
Excellent medical facilities, fast internet connections, quality accommodation, and modern business facilities mean that Thailand will continue to be an attractive location for foreigners when it comes to real estate investment.
In addition, when it comes to locations like Koh Samui the limited availability of property will also help drive up the prices.
Buy to let: another way to profit from property investment in Thailand
Of course, an increase in the value of the property itself is not the only way to make a return on your investment. Many investors will buy to let, meaning they purchase the property so they can profit from it by allowing people to stay there and charging them rent.
Rental yields of just over 5% represent good opportunities for investing in Thailand for foreigners. With this being the average figure, you can expect to find higher yields in some parts of the country. This will include exclusive properties on islands like Koh Samui.