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Reopening of Thailand’s borders to international tourists might help developers dispose of unsold Bangkok flats, analysts say

  • Foreigners typically account for about 10 per cent of all home transactions in Thailand and Chinese buyers make up more than half of this foreign demand
  • Chinese buyers were ‘the main driver for Bangkok flats before Covid-19’: Knight Frank executive

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Tourists at Wat Pho in Bangkok. Thailand began allowing in fully and partially vaccinated foreigners from February 1. Photo: EPA-EFE
Cheryl Arcibal

The full reopening of Thailand’s borders to foreigners is likely to help the struggling Bangkok flats market, analysts said.

Thailand began allowing in fully and partially vaccinated foreigners from February 1 and has proposed a travel bubble with China, which analysts said would help developers sell their inventory. China, along with Malaysia, was among the two largest sources of foreign tourists in Thailand before the coronavirus pandemic and jointly accounting for a third of the 40 million international visitors coming to Thailand in 2019.

“The border reopening would affect the [flat] market in a specific segment. The luxury and super luxury segments would benefit from the recovery of [foreign tourism] in Bangkok, resulting in increased buying or renting volume. The midscale to upscale segment in [several areas] would [also] benefit from the recovered demand from China as well,” said Palathip Chunhasomboon, manager, research and consultancy, research and valuations at Savills Thailand.

The reopening of borders is significant because foreigners typically accounted for about 10 per cent of all home transactions in Thailand. Chinese buyers made up more than half of that foreign demand, analysts said.

Bangkok’s flats market has been struggling with a supply glut, after developers went on an unfettered building spree in anticipation of higher demand from both local and foreign buyers. Over the past five years, Thai developers have launched more than 230,000 flats in Bangkok, including over 60,000 units in 2018, according to property consultancy Colliers.

In the last two years, launches have slowed to 20,000 units a year as developers looked to reduce their high inventory levels. As of the end of last year, 62,170 units remained unsold in Bangkok, a decrease of just 2.9 per cent from the 64,043 units available the previous year, according to Colliers.

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