Bangkok’s real estate market is rapidly improving after the pandemic and restrictions for the last 2 years.

Property professionals, investors and landlords are getting back on track as the market continues to recover.After 2+ years of hardship for everyone, and now that most countries have reopened, there is a general positive outlook.

The pandemic has however created many opportunities for real estate investment, and this is not going to last for too long. Many real estate investors have taken advantage of the lower or reduced property prices.

Real estate investors – Buying the dip

However, despite the tough times, a special breed of real estate investors have taken advantage of the discounted prices.

They live by the mantra:

“In the midst of chaos, there is opportunity”.

This type of investors see the crisis as the opportunity of the century and are diving into the Capital’s property market head first.

This article provides an insight into the profile of these investors, the opportunities they seek and the real estate bargains currently on offer.

Investors profile

Fresh Property has noticed an uptick in experienced second-time investors looking for what they refer to as depressed deals and motivated sellers.

Overview of the profile of these investors

• Most of these investors are Thai nationals aged between 35-50 years old. The majority of them are prepared to buy a property in cash if it helps their negotiating position.
• They are experienced and have a portfolio of rental condos, and their search specifically targets neighborhoods or projects in which they have personal investment experience.
• They favour rental yields over short-term capital appreciation/ resale prospects. They put a lot of attention and focus on ensuring that they are buying below the market price.

Sellers Profile

Fresh Property has not experienced many sellers that are at risk of mortgage defaults. And now that the economy and industries are recovering, there are still very good deals available but not for long.

Fresh Property is seeing property discounts from two primary reseller profiles

1. Secondary market listings (Projects over 3 years old)

Most of the landlords that have acquired condos in the last 5-10 years, have already benefited from good levels of capital appreciation.

Many landlords have also benefited from relatively stable rental income during their period of ownership. Therefore, these sellers have a large margin for negotiation even if they offer substantial discounts.

The market condition has had the effect of grounding these sellers and making them more realistic with their profit expectations.

2. Foreign investor sell-off

The sellers that have been the most reactive have been foreign investors. Many of which have committed to down payments in off-plan projects.

These sellers are looking to sell quickly as they prefer to cut their losses and hold cash. But now the market that is heading in a positive direction, it means that foreigners may choose to wait and get a better return.

Investment case study – Sold at a HUGE discount

The Base Park East Sukhumvit 77

Developed by Sansiri, this project is a popular residential option for young working professionals. It is located in On Nut, a convenient residential neighborhood.

Rental rates for a standard 1-bedroom in the condo ranges between 12-15,000 THB per month.

This condo unit was sold at only 2.2 MTHB. This is approximately a 26.6% discount based on the market average. In addition, the property is expected to offer a rental yield of approximately 6.54 – 8.2%. A great deal.

The seller was a foreigner and it was renting out the unit on a long-lease basis. However, the owner finding it increasingly difficult to manage it from overseas, so decided to sell it at a discounted price.

Opportunities during and after the pandemic – Key investment takeaways

During difficult times, it is important to have a cautious investment approach.

The future however, looks bright, with a speedy recovery going on and Thailand borders that are now open. As we explained, some investors have taken advantage and are buying properties at very good prices.

The investors that are on a shopping spree, actually have a conservative approach to their investment style:

• Most of them are in a good financial position and many are buying in cash to avoid over-leveraging themselves
• These investors are experienced and are buying in projects or neighborhoods in which they have market insight and knowledge
• Most are buying resale units with rental returns/ high rental yields as their main investment objective

Capital appreciation potential is still a consideration, however these investors seem to focus primarily on securing big discounts on asking price rather than speculate on appreciation market trends.

Fresh Property is a full-scope and established Bangkok Real Estate Agency. We offer consultancy, sales, rental and property management services.

Buyers and renters are welcome to browse our extensive portfolio of new projects, resale properties and rental homes.

Alternatively, feel free to contact us by sending us an inquiry to [email protected].