Bangkok real estate market: recovery not until 2027 - buyers remain skeptical!

Bangkok real estate market: recovery not until 2027 - buyers remain skeptical!

In Bangkok, the condo market remains an exciting story that will unfold in the coming years. According to the Bangkok Post The market will only see a significant recovery in 2027, while conditions are expected to remain stable until 2026, particularly due to the upcoming general election. Surachet Kongcheep, head of research at Cushman & Wakefield Thailand, says: Developers are currently cautious and are betting that a new government will boost buyer confidence and the economy.

In the first nine months of 2023, 13,504 new condo units were offered in Bangkok, remaining stable compared to the previous year. By the end of the year, the total could grow to around 17,000 units, similar to last year. Developers are increasingly focusing on clearing unsold inventory, which includes tens of thousands of units nationwide with a total value of over 100 billion baht. The situation is particularly challenging for buyers who are having increasing difficulty securing a mortgage. Banks not only evaluate applicants, but also the financial background of their employers.

The buyer behavior

Demographic changes also play a crucial role. From 2026, Thais born before 1971 will retire and are unlikely to buy new homes. Therefore, developers are increasingly looking abroad and are actively looking for markets such as China to attract buyers. Interestingly, sentiment among Chinese buyers has improved, suggesting that previous security concerns in Thailand appear to have eased. Thailand therefore remains a popular option for Chinese buyers, particularly in the residential property sector.

The Bangkok market shows some mixed developments. Loud Bamboo Routes There is a modest price increase for condominiums of around 2-4% compared to last year. In central locations, prices range between 120,000 and 150,000 THB per square meter. However, high inventories and selective buyer behavior are dampening growth. Rental yields in the preferred expat areas are stable at 5-6% annually and show strong demand, particularly in the luxury segment.

Forecasts and developments

As far as the volume of new construction is concerned, a supply of around 25,000 to 30,000 new condominiums is forecast for 2025. Many developers are shifting their focus to the luxury segment as the absorption rate for new condos is only 35%, well below the healthy benchmark of 50%. Interestingly, the average time to sell is 64 months, a 60% increase from last year.

Additionally, it is expected that the government could increase ownership limits for foreigners from 49% to 75% and plan incentives such as 100% financing for first-time buyers over THB 10 million. This could make the market more attractive for international buyers. The estimated market increases for 2025 and 2026 are a moderate 2-7%, with the luxury segment and convenient locations in particular outperforming the market. These developments will be supported by the existing infrastructure projects such as new BTS and MRT stations, which could cause price increases of 10-15% in these areas, according to forecasts Green Acres.

Overall, the real estate market in Bangkok presents itself as a changing but challenging environment full of opportunities, especially for the eyes of foreign buyers and investors. Dependence on domestic demand is decreasing while internationalization continues to gain momentum.