Thailand real estate market 2021.

The Thai real estate market continued to face challenges in 1H 2021 due to prolonged impacts from COVID-19, especially in the residential, hotel, retail, and office sectors. The pace of economic recovery remains tied to pandemic control, vaccine distribution, and government economic support.

Economic Outlook

The global economy is in recovery mode, with the IMF projecting global growth at 6% for 2021 and 4.4% for 2022. Thailand’s GDP is expected to grow at a moderate 1.8% in 2021, largely due to multiple waves of outbreaks and a slower-than-expected vaccine rollout. GDP growth is forecasted to pick up to 3.9% in 2022, driven by domestic spending, government policies, and potential herd immunity by mid-2022.

Residential Market

The condominium market showed a 38.7% decline in new launches in 1H 2021 compared to the previous year, mainly due to pandemic uncertainties. Developers shifted focus to low-rise housing projects catering to end-users with real demand. Prices for condos in the Central Business District fell by 9.9% YoY, while prices in the suburbs declined by 19.5%.

Luxury Housing Market

The luxury housing segment (priced above 10 million baht) demonstrated resilience, with steady demand driven by the need for larger homes due to work-from-home trends. The sales rate for this segment rose to 66.3% in 1H 2021, reflecting a strong appetite among affluent buyers.

Hotel Market

Hotel occupancy rates in Bangkok dropped significantly to an average of 20% in 1H 2021. The slow vaccine rollout and the third wave of infections resulted in a sluggish recovery for the tourism sector. No new luxury hotels were opened in the first half of the year, and delays are expected for planned projects.

Retail Market

Retail demand remained subdued, with landlords offering rent reductions to retain tenants. Occupancy rates stayed high in CBD and Fringe areas, driven by support measures for tenants. The retail sector is increasingly shifting towards online channels as consumer behavior adapts to the "New Normal."

Office Market

The Bangkok office market saw a continued increase in supply, while demand showed signs of recovery. The market’s overall occupancy rate fell to 83%, its lowest in a decade. Although asking rents remained steady, tenants have gained strong bargaining power due to rising supply and shifting demand patterns.

Outlook

The real estate market in Thailand is expected to remain challenging in the near term. Recovery will depend heavily on the pace of vaccinations, pandemic control, and economic policies. Market players are adapting to new consumer behaviors, with an emphasis on digital transformation and flexible work environments.