Thailand’s property market currently shows differing trends. Industrial real estate is experiencing momentum supported by investment inflows, government initiatives, and demand from manufacturing and logistics sectors. In contrast, the residential property market faces challenges related to high household debt levels and cautious buyer sentiment. For investors, the industrial sector appears to present more resilience and potential growth in 2025 and beyond.
Industrial Property: Growth Linked to Policy and Demand
The outlook for Thailand’s industrial property sector from 2025 to 2027 projects a growth rate of approximately 4–5% annually in sales and leases of industrial land. Factors contributing to this include:
- Government incentives attracting foreign manufacturers, particularly in automotive, electronics, and electric vehicle industries.
- The Eastern Economic Corridor (EEC) infrastructure project, driving demand in eastern provinces for leased and rental spaces.
- The development of industrial estates into “smart parks” with advanced technologies aligned with Thailand’s bio-circular-green (BCG) economy strategy.
- Active foreign investment from countries such as Japan, China, and Singapore, drawn by established supply chains and connectivity.
- An occupancy rate of around 80% in industrial estates reported in 2024, indicating steady demand.
Challenges such as increasing land prices, limited availability of development land, and competitive pressures from other Asia-Pacific countries could affect growth. Nonetheless, Thailand’s geographic location and government infrastructure support provide advantages in the regional market.
Residential Property: Facing Structural Challenges
The residential sector has experienced a slower recovery, influenced by several factors:
- High household debt, limiting domestic purchasing capacity.
- Stricter lending regulations impacting mortgage availability.
- Geopolitical uncertainties reducing interest from some foreign buyers, including those from China.
- Oversupply in condominium markets, particularly in Bangkok, leading to pricing pressure and slower sales.
Although policy adjustments like increased foreign ownership quotas and extended leasehold terms have been introduced, overall demand remains subdued. Rental yields in certain urban areas remain stable, but sales growth is generally slower compared to the industrial sector.
Market Outlook
Looking ahead, the industrial real estate sector is expected to maintain steady growth, supported by:
- Projected annual growth of 4–5% through 2027.
- Increasing demand in logistics, manufacturing, and data center spaces.
- Alignment with regional strategies to diversify supply chains.
The residential market may experience localized improvements; however, structural issues such as household debt and oversupply are likely to continue influencing performance.
Investors focusing on stability and long-term potential may find the industrial property market attractive due to ongoing government initiatives, infrastructure projects like the EEC, and the trend toward sustainable, technology-driven estates.