The Number One Choice for Investors
Thailand’s capital city, Bangkok, currently offers an excellent investment opportunity for anyone looking for fast capital appreciation and reliable rental returns.
Compared to other key Asian cities such as Hong Kong, Singapore, Tokyo, Shanghai, Beijing or Kuala Lumpur, prices in Bangkok are currently very low – with an average price for prime, city centre property of just $4,000/m2. This compares favourably to Beijing at $15,000/m2, Singapore at $20,000 and Hong Kong at $25,000/m2. However, such is the strength of the market in Bangkok that prices are guaranteed to not stay this low for much longer. For more than five years, prices in Bangkok have risen by 6-10% each year, making Bangkok one of the fastest-growing real estate markets in South East Asia.
After a relatively flat period of growth following the introduction of a new government in 2014, Thailand's economy is now back on its formerly strong and consistent growth trajectory, with an increase of 1.3% in the first quarter of 2017, putting the country among some of the world's best performers.
The improving economy has led to the rapid increase of the middle class in Thailand, who are spending their new-found wealth in upgrading their accommodation. This, in turn, has led to the fast increases in prices for condominiums, especially those located in prime positions within the city centre, where few good building plots remain.
The upwards trajectory of Bangkok’s property prices are also partially a result of Thailand's entry into the ASEAN Economic Community at the end of 2015. ASEAN offers tariff-free trade and visa-free travel between all member countries, and due to Thailand’s position right in the centre of the ASEAN region – at its very crossroads – Thailand is expected to benefit more fr om the introduction of the new trading zone than most of the other member nations.
Much of the activity in the real estate market is centred around developments located within easy reach of stations on Bangkok’s mass transit system, which now makes it easy to navigate the often heavily-congested streets of Thailand’s capital city. The network, which comprises the underground, Skytrain, bus and rail networks, is seeing massive expansion over the next few years with the number of lines increasing fr om eight to 15. As new stations are announced, so new areas of the city become attractive areas to live.
According to research published by Global Property Guide in 2015, rental yields in Bangkok range fr om 5% to 8%. This makes Bangkok the fourth best-performing capital city in East Asia after Manila, Jakarta and Phnom Penh – another sign that there is still plenty of capital appreciation left in the market for condominiums.
Larger apartments in Bangkok tend to earn higher rental yields than smaller apartments. A 50m2 apartment in Bangkok’s central location earns reasonable rental yields at 5.6%, while a 120m2 apartment, also centrally located, earns high rental yields of 8%.
Due to the increasing popularity of online accommodation booking sites such as AirBnB, it is also possible to obtain even higher rental yields through offering apartments for short-term rentals - sometimes in excess of 10%.
Currently foreign buyers make up a relatively small proportion of the total market for condominiums in Bangkok, but this situation is changing fast as well-informed investors realize that there is little growth left in most of the key Asian cities and begin to look further afield to see good returns on their investments. This is especially the case with premium projects in the heart of the city, wh ere foreign buyers now make up a large proportion of total sales.
A Perfect Location for a Second Home
Bangkok attracts not only investors – it also attracts foreigners looking for a second home in a vibrant and affordable city, in a country which is well-known for the warm welcome by the country’s friendly and hospitable people. That’s the reason why Thailand is known around the world as ‘The Land of Smiles’! The city is now a highly cosmopolitan one which welcomes visitors from all over the globe. Visitors are attracted not only by the legendary Thai hospitality, but also its world-famous cuisine, year-round warm and pleasant tropical climate, thrilling nightlife opportunities, low-cost shopping in the city’s many large, modern shopping malls and beautiful temples and other tourist attractions. English is widely spoken in the city and Bangkok also has a sizable Thai-Chinese population.
With its modern Suvarnabhumi International Airport, Bangkok has become one of Asia’s main transport hubs. The new high-speed rail link to the airport makes it possible to reach the centre of Bangkok from Suvarnabhumi in under thirty minutes.
Tourist numbers to the city have been increasing rapidly – visitor numbers were up 9% year-on-year in 2016, to a total of 32.4 million. A survey from Mastercard in November 2016 stated that Bangkok is now the world's most-visited city - edging out London for the first time in history. Much of this increase came from China, wh ere over 10 million tourists arrived during 2016. Chinese visitors are now by far the most numerous visitors to Thailand, accounting for nearly one in three of all international arrivals.
So, whether you are looking for an affordable second home in an exciting and pleasant city to live or an investment which provides a good steady rental income combined with some of the fastest capital growth that you can find anywhere in the world currently, Bangkok is an ideal choice.