There is an interesting fact. When there is an economic crisis in the world, interest in real estate in Thailand increases. This is exactly the situation that is being observed today. The market, which was quiet during the pandemic, is recovering, and foreign demand is growing. If you have also paid attention to Thai square meters and want to figure out what you can earn here, read our new material.
Real estate market statistics
Housing prices in Thailand are slowly but rising. The demand for real estate is improving following the restoration of the tourist flow.
According to the Bank of Thailand, in the third quarter of 2023, the average cost of a house in the country increased by 3.6% year-on-year. Adjusted for inflation, it turns out to be 3.3% per annum. In Bangkok and the surrounding area, prices for private homes rose by an average of 3.8%. Condominiums rose in price by 4.5%, townhouses – by 3.4%. In other regions, the figures are slightly more modest – on average, plus 2.3%.
The forecasts for 2024 are more optimistic. Before covid, almost 40 million people visited the country annually, and in 2023, when the borders first opened, there were not even 30 million. Along with the restoration of the tourist flow, the demand for real estate should also increase.
Foreign buyers of real estate in Thailand
Traditionally, buyers from mainland China and Hong Kong take the first place in terms of the number of transactions. There are many investors from the USA, Singapore, Taiwan, Japan and the UK. And of course, from Russia.
According to the Real Estate Information Center, in the first nine months of 2023, 10.7 thousand apartments worth 52.3 billion baht ($1.5 billion) were sold to foreigners, which is 38% more than a year earlier.
The main buyers are Russians and Chinese. Representatives of China account for 4.9 thousand objects, or almost 47% of total sales. Russians are in second place by a wide margin from the leaders – 962 deals.
Analysts are also observing record demand for villas in Thailand.
Alexey Shukhovtsev is a real estate expert in Thailand DDA Real Estate
Pattaya, Phuket and Bangkok are the main magnet cities for foreign real estate investors. Phuket is the most popular among Russians, the entry threshold here is $50 thousand for a small studio. A more budget Pattaya is in second place – from $35 thousand. The resort is in great demand among Chinese investors, as is Bangkok – from $45 thousand. For Russians, Bangkok is in third place in popularity.
View of Pattaya beach 
Alexey Zaichenko broker Alza Real Estate
The championship in the number of condominiums sold for the province of Chonburi, Pattaya, is almost 42% of all sales. According to forecasts, growth here will continue in 2024 and 2025. Phuket also remains the leader in interest from foreign investors, but with a higher entry threshold. In 2023, the resort attracted investments worth more than $100 billion. This is a historical record.
Tourism potential
Thailand is attractive for tourists. Primarily due to the local climate. You can relax here all year round. There is a huge selection of beaches, there is no pronounced rainy season. Friendly and hospitable locals – Thailand is called the Land of Smiles for a reason. There are no special strict norms of behavior, a peaceful “comfortable” religion. All this allows tourists and property owners from all over the world to feel at ease in the country.
Alexey Zaichenko broker of Alza Real Estate
There is virtually no rainy season in Pattaya. Another advantage of the resort is the absence of threats of tsunamis and other natural disasters.
Thailand is attractive for tourists. First of all, thanks to the local climate
, Alexey Shukhovtsev is a real estate expert in Thailand, DDA Real Estate
Thailand is the only country to which there is no indifference: you either fall in love once and for all, or she annoys you. Agree, investors are people too. But, of course, no one cancels the great potential. In my opinion, the local market will grow actively for at least another five years, then a slight stagnation is possible, but this does not apply to Phuket.
Another significant factor for Thailand is the affordable visa regime. Today, tourists from Russia can stay here without a visa for 60 days. There are visa options for those who want to live in the country permanently. The most popular are: pension (from 50 years old), student (based on studying at a language school), multivisa from 5 to 20 years old, guardianship, business.
Real estate – ordinary and branded
Almost all major international hotel operators are represented in Thailand, which have been actively signing contracts with local developers over the past ten years. In addition to the usual branded real estate is being built. In Phuket, the choice of apartments from leading hotel chains is wider than in Istanbul or Los Angeles.
Alexey Shukhovtsev is a real estate expert in Thailand DDA Real Estate
Now modern complexes with a very developed infrastructure are being built, large hotel players are coming in, developers offer high returns (on average 6-9% per annum), some give additional preferences in the form of long-term visas for investors. According to official sources, today 12% of 20% of possible construction sites have been developed. Draw your own conclusions. And this applies to all the islands of Thailand.
Modern complexes with developed infrastructure are currently being built in Thailand 
Alexey Shukhovtsev is a real estate expert in Thailand DDA Real Estate
Due to the high competition, the quality of the complexes is growing. The trend is associated with high demand among Europeans and Americans, who place strict requirements on the quality of buildings, the so-called European standard.
Low prices, high incomes
The low threshold for entry into the local market also attracts foreign investors to Thailand. The cost of high-quality view apartments starts from $100 thousand. The initial payment is from $8 thousand. And for this amount you will receive a fully equipped apartment equipped with appliances, ready for both your own use and for rent. Multi-bedroom villas are sold from $200 thousand.
Alexey Zaichenko broker of Alza Real Estate
The rental yield, of course, is dictated by the location. Beach locations, although they sink in the off-season, but they compensate well for losses in the season. One developer informed me that with a guaranteed yield of 7%, he can earn 9% only in December and January. On average, the rental yield reaches 7-10% per year. At the same time, in some cases, the investor can receive up to 15%.
Low taxes on purchase and maintenance
Alexey Zaichenko broker of Alza Real Estate
When purchasing new buildings, the buyer pays only 1%, the rest of the taxes are on the developer. In the case of the secondary market, about 6.3% is obtained. In this case, the amount is divided in half between the buyer and the seller. And the annual tax on real estate ownership is 0.3% of the estimated value of the property.
Thailand has low taxes on the purchase and maintenance of real estate
Two forms of ownership
Foreigners are legally entitled to purchase real estate in their own name. There are two main types of ownership in Thailand:
- full private ownership (freehold);
- long–term lease (leasehold).
Both types allow the investor to freely dispose of square meters: to live, rent, sell or give. Although the lease agreement does not give full ownership rights, it is concluded for a very long time – 90 years (30+30+30 ) or more.
Alexey Zaichenko broker of Alza Real Estate
Buying real estate in a leasehold is a standard practice called the “Thai quota”. This format of registration makes it possible not to notify the tax authorities in the country of citizenship of the owner about the acquisition. Due to the lack of professionalism of some local real estate brokers, the phrase “Thai quota” in the perception of many Russians means questionable ownership, in fact, it is not.
Purchases in the primary market
Real estate transactions are regulated by the Civil Code, as well as the Commercial Code, which are aimed at protecting the interests of foreign investors. Therefore, the main risks are reduced to choosing a reliable and conscientious developer.
Alexander Davydovsky Managing Director of the company Art House Co., Ltd.
If the developer has proven his financial and professional worth, has earned a decent reputation, then the risks are close to zero. But still they are there. For example, a long–term construction is a significant violation of the deadlines for the construction and commissioning of a house, as well as the freezing of construction for an indefinite time.
This is due to the financial and/or administrative problems of the developer company. I repeat the same mantra to clients: read the contract carefully. Especially in terms of the deadline for the completion of the object by the developer. The contract should clearly state the deadlines for delivery and, most importantly, the conditions under which they are postponed. The contract should not imply that deadlines can be postponed for reasons beyond the list of force majeure circumstances countless times.
Real estate transactions are regulated by civil and commercial codes, which are aimed at protecting the interests of foreign investors
Purchases on the secondary market
Unlike primary real estate, where there is a ready-made purchase and sale contract from the developer, it is necessary to draw up a contract yourself. This means that it is impossible to make a deal without involving a lawyer. Naturally, it is better that the lawyer be from the buyer’s side or his representative, and not from the seller’s side.
In addition, there are nuances when paying for a transaction.
Alexander Davydovsky Managing Director of the company Art House Co., Ltd.
One of the important points when concluding transactions in the secondary market is the use of an escrow account. This is my subjective norm, not everyone likes to resort to it, especially real estate sellers. Often, the seller asks the buyer to transfer money to his foreign account outside the jurisdiction of Thailand, committing to register the property with a new owner in the future. But if registration is not carried out, it becomes problematic to prove payment. Therefore, the best way out would be to make a transfer to an escrow account. You can open it, for example, on the basis of a law firm that conducts your business in Thailand. Next, your lawyer will transfer the payment to the seller at the time of registration of the property.
Two strategies for investors
There is no universal offer for all investors. It all depends on the budget and the goals of the buyer. Investment strategies are based on them. Realtors identify two of the most profitable and popular options.
Earning on the increase in the value of real estate during construction
Alexey Shukhovtsev is a real estate expert in Thailand DDA Real Estate
At the presale stage, the price is minimal, and the developer is ready to provide additional discounts, installments. In our practice, there are clients who resold real estate after a year and earned almost 100% on the invested capital.
At the presale stage, prices for objects are minimal, and developers are ready to provide bonuses 
Alexey Zaichenko broker Alza Real Estate
The company selects an object for the client that has some unique characteristics that will be in short supply from the developer in the future. For example, the location. We purchase and fix the cost per square meter at the presale stage. Next, we monitor the most profitable moment for the investor to exit the project, that is, resale. In this way, you can get a profit of up to 40%. And in some cases, even more, when additional factors are imposed. For example, a change in the ruble exchange rate.
Alexander Davydovsky Managing Director of the company Art House Co., Ltd.
On average, the price of an apartment increases by 25% between the start of construction and commissioning of the facility.
Purchase of real estate for subsequent rental
Alexey Zaichenko broker of Alza Real Estate
Based on the financial capabilities of the investor, the most demanded object in the rental market is selected. And in the future, at the request of the investor, the company can take over the disposal of the property, as a result of which the owner will receive a stable passive income of 7-10% per annum.
For such purposes, it is best to choose objects in beach locations. This is where the demand for rental housing is highest.
Photo: Unplash (Sara Dubler, Ryutaro Uozumi, Vitaly Sacred, Paul Szewczyk, Andreas Johansson, note thanun, Frugal Flyer)
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