Central Thailand’s real estate market is undergoing a significant change. In the first half of 2024, there was a 20.2% year-on-year increase in unsold residential units, totaling 9,813 units valued at ฿ 31.59 billion ($941.01 million). This demonstrates a growing oversupply compared to the same period last year.
The increase in unsold properties is capturing the interest of investors globally. The surplus presents challenges and opportunities, particularly for foreign individuals looking to invest in Thailand’s real estate or to purchase a vacation home. It’s vital to comprehend the factors driving these statistics in order to make well-informed decisions.
Surge in new project launches amid market challenges
Despite the increasing number of unsold units, developers are not slowing down. New project launches have increased by 56.4%, introducing 835 new units valued at ฿ 4.13 billion ($123.06 million) to the market. Overall, 10,327 units were offered for sale, marking a 7.9% increase in units and a 10.8% increase in value year-on-year.
The rapid expansion indicates that developers are confident about future demand or are working hard to remain competitive. This means potential buyers will have more properties to choose from and potentially more negotiating power. However, it also raises concerns about market saturation and the long-term sustainability of this growth.
Rojana Industrial Park leads in unsold units
The Rojana Industrial Park has become a focal point in this trend, with the most significant accumulation of unsold units. A staggering 4,497 units, valued at ฿ 17.47 billion ($520.31 million), remain on the market in this area alone. Other regions with high levels of unsold inventory include Bang Pa-in, Saraburi City, Wang Noi, and Nong Khae.
Investors may find unique opportunities in these areas. The high inventory levels could result in competitive pricing and favorable terms for buyers. However, it’s important to assess why these units remain unsold. Is it due to location, pricing, or other market factors?
Decline in residential demand and sales
In contrast to the increase in new construction, there has been a significant drop in the demand for residential properties in Central Thailand. Only 514 new units were sold in the first half of 2024, which represents a 63.4% decrease from the previous year. The total value of these sales also decreased by 64.2% to ฿ 1.52 billion ($45.25 million).
The significant slowdown suggests that the market is experiencing change. Economic factors, shifting buyer preferences, and external influences such as global economic conditions may contribute to this decline. For foreign investors, this downturn could indicate a buyer’s market, but it also requires careful evaluation.
Price range with highest unsold inventory
The largest number of unsold units is in the price range of ฿ 2 million ($59,580) to ฿ 3 million ($89,370), totaling 2,936 units valued at ฿ 7.67 billion ($228.37 million). This suggests an oversupply or reduced demand among mid-market buyers in this price range.
For investors looking for properties in this price range, there might be room for negotiation and potential for favorable deals. However, it’s important to consider factors such as the desirability of the location, the quality of the property, and its long-term investment potential.
What this means for foreign investors
The real estate market in Central Thailand is currently presenting a mixed bag for foreign investors. There is an increased supply and decreased demand, which could potentially lead to more options and better prices. However, it’s important to understand the underlying reasons for these trends.
- Opportunities: Potential for lower prices, wider selection, and negotiation leverage.
- Risks: Market saturation, potential decline in property values, and economic uncertainties.
Investors should conduct thorough due diligence, consult local real estate experts, and stay informed about economic indicators affecting Thailand’s property market.
