Is there a property bubble coming in Thailand?
For several years now building projects have been growing up like mushrooms in Bangkok, Pattaya, Phuket, and other places. This today results in an oversupply of empty, not sold condominiums. At the same time, Thai people are buying more and more, mainly second-hand condos because they are cheap today.
The foreigners who earlier bought a property in Thailand have reduced to less than 50%, mostly due to unfavorable exchange rates. This trend started around 2018 after the worldwide economic decline but things like later climate panic, visa rules, and others also have had an impact. The virus pandemic has also taken a huge toll on the market, especially for developers.
If you sell your property in Thailand and transfer the money back to your home country you probably will do a good deal, depending on how much your country’s exchange has lowered.
Most developers are today reducing their portfolio by up to 50%, but this is still not enough. Is Thailand facing a property bubble?
Most Thai buyers need to get a bank loan to buy the condo. That plus the ease of lending money have created a vulnerable estate financing market where Thai people are generally having too many debts. To meet this problem in time Thai banks stopped lending out money a couple of months ago, for buying real estate. This is probably a good idea to combat the over-lending but it is also devastating to the real estate market. Many Thai customers simply can not buy real estate.
So, is there a property bubble coming up?
Experts around the world warn about the more or less severe stock market decline and property bubbles. I can not tell about the stock market other than that the economy is in pretty good shape considering the pandemic toll. The debt ratio to GDP is well under 80%, which is considered to be the maximum for a healthy economy. When it comes to property my personal view is that it will not suffer greatly for two reasons. There is no big consumer debt that could start a financial crisis, and the properties today already is very low priced. The Bangkok market though is overpriced.