Published in Real Estate Trend

Thailand's Residential Real Estate Market Faces Continuous Decline: Young Thais Opt to Live with Parents Amid Property Challenges

Published on: Nov 5, 2024 6:07 AM

Thailand's Residential Real Estate Market Faces Continuous Decline: Young Thais Opt to Live with Parents Amid Property Challenges

The Thai residential real estate market is currently experiencing one of its most prolonged slumps in recent history. According to insights from TTB Analytics, the economic analysis unit of TMBThanachart Bank, the market for low-rise housing is likely to continue contracting over the next eight quarters, marking the longest period of decline in recent memory. 2024 is expected to bring even greater challenges for the sector, potentially the toughest in a decade, as young Thais increasingly decide to live with their parents, relying on inherited property rather than purchasing new homes.

Key Factors Behind the Decline

TTB Analytics’ data paints a bleak picture for Thailand’s low-rise housing market. The latest reports reveal that in the first half of 2024, the number of housing ownership transfers decreased by 14.2%, representing the sixth consecutive quarter of decline. Furthermore, data from August 2024 shows a year-over-year drop of 14.1% in low-rise housing transfers, indicating that the market continues to soften significantly. The report projects that the trend will persist, potentially resulting in a 13.3% decline in ownership transfers over 2024, which would mark eight consecutive quarters of negative growth.

Several factors contribute to this downturn:

  1. Shifting Preferences: A growing trend among young Thais to live with their parents and inherit family property has reduced the urgency for new home purchases.
  2. Economic Challenges: Thailand's economic recovery remains gradual, with inflationary pressures and interest rate adjustments impacting the purchasing power of potential buyers.
  3. Declining Demand for Low-Rise Housing: Low-rise properties, particularly standalone houses and townhouses, have seen dwindling interest, adding further strain to the market.

Potential Solutions and Market Outlook

To counteract this continued decline, TTB Analytics suggests looking toward foreign investment under strict regulations as a way to bolster demand. Attracting foreign buyers, particularly those interested in longer-term stays in Thailand, could provide a much-needed injection of capital into the residential sector.

The Thai government may consider more flexible policies to accommodate foreign buyers while safeguarding national interests, as seen in other Asian markets. This approach could not only stabilize the current market but also set the stage for sustainable growth in the years to come.

The Road Ahead

The outlook for Thailand’s low-rise residential property market in 2024 remains challenging. With homeownership transfers expected to contract for eight consecutive quarters, industry stakeholders may need to reevaluate their strategies and explore new opportunities to revive demand.

For young Thais, the cultural shift towards staying in family homes is a significant trend that could reshape Thailand’s real estate landscape for years to come. However, with potential regulatory adjustments to attract foreign investment, the market may find a path to recovery—albeit with a careful balance between growth and safeguarding local ownership.

Source: TTB Analytics, TMBThanachart Bank

Naipaporn
Naipaporn Janbang Author
Property Content Specialist

Experienced content creator specializing in social media marketing, with a focus on the property market. Also, an SEO content specialist with over three years of experience in property marketing. Proficient in leveraging various digital channels to maximize brand exposure and drive engagement.

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