I’m hoping someone in the community can give me some real insight into a question I’ve never quite been able to answer.

How are there so many housing developments being built around Bangkok and suburbs, and who is actually buying them?

All these developments are primarily built for Thai buyers, since foreigners can’t own land. But with new houses and developments constantly going up, I’ve always wondered how developers are finding enough buyers to absorb all this supply.

Looking at developers such as SC Asset, Pruksa, AP Thailand, etc, they often have a pretty clear good/better/best branding. Homes in the ฿5–7 million range, then ฿8–10 million, ฿10M+, and even ฿30M+ ultra luxury segment.

The part I struggle to understand is the affordability. To comfortably qualify for and service a mortgage on a ฿5–10 million home, you’d need a fairly substantial income — well above what I’d consider a typical Thai salary. Even when looking at national income statistics, the percentage of people earning the equivalent of $90,000+ USD per year is very small (top 1%).

 

Yet, I constantly see these developments selling, with perfectly normal Thai families living in them. Sometimes the cars outside the house even seem more expensive than the house itself which also baffles my mind.

 

Are buyers taking on very large loans based on expected appreciation? Is there a lot of refinancing or rolling debt involved? Is there an exploit of the 100% LTV?

I’ve also wondered whether there’s some element of money laundering or other sources of wealth involved, but honestly, when I see actual Thai families living in these homes, they look like completely ordinary families.

 

I’m genuinely curious about how the economics work. Who is buying all these homes, and how are they affording them?

Would love to hear from anyone in Thai real estate, banking, finance, or from Thai homeowners themselves.

Edited August 15Aug 15 by azfellowbkk

I've been asking the same question, especially for the higher-priced developments. Spouse and I have a getaway condo in Bangkok and, driving back to Pattaya, we see billboard after billboard advertising new housing projects in the 20 to 30MB range and up. We are fairly well-off but could not afford to pay 30MB, nor would we want to spend that much.

My spouse's Thai brother returned last year from living in the US and he bought, for cash, a new single-family home in a nice Bangkok project in the suburbs for around 7MB, unfurnished but it had a kitchen and he negotiated aircons. The project has about 100 homes in the 7MB to around 9 MB range and is mostly sold out. I think in that range Thai buyers can be found, although it can take awhile. His project has been open for a number of years and still has a few homes for sale.

We are actually shopping for a Bangkok house in the suburbs so we have been checking out some of the projects. Most seem very pricey for what you get--which is usually a bare-bones empty house with no kitchen, no drapes, no aircon, no appliances, no electronics, no furniture, and no built-ins except maybe the bath vanities. Finishing them could run another couple million. The new projects we have recently visited in Bangkok, with houses in the 12MB to 20MB range, including one doing a spashy Saturday open house with lots of billboards advertising it, have had none or only a few customers--and the only foreigner I've seen was me.

The answer is clearer in Pattaya. It was foreigners who were buying the majority of all the expensive housing that has been built here both before and in the years since covid. And, is still being built--although that may come to a crashing halt. One new housing project that we lived at, around 30 houses, had all foreign buyers except I think one or two.

Yesterday, we visited two new housing projects on the Darkside of Pattaya. One had bare-bones homes of around 12 to 15MB, the other around 15 to over 20MB. Saturday is usually a busy time for house hunting--we were the only ones at each project. I asked the sales girl, with the company crackdown, how is a foreigner going to buy one of her houses? She sputttered a bit and mentioned doing a 30-year lease. I was curious, so I asked Google about it. I used the example of a foreigner buying a 20 million baht new house from a developer. Google's answer:

To buy a 20-million-Baht house in Thailand under a 30-year lease scheme, a foreigner signs a 30-year Land Leasehold Agreement for the land plot (the maximum legal duration under Section 540 of the Thai Civil and Commercial Code) while concurrently acquiring 100% legal ownership of the physical house structure in their personal name via a Right of Superficies. The transaction requires mandatory registration at the local Land Office, incurring an official 1% lease registration fee and 0.1% stamp duty based on the contract value, alongside a 2% building transfer fee on the appraised value of the house. Because the Thai Supreme Court strictly rules that prepaid future renewal clauses (such as 30+30+30 years) are legally void and unenforceable on day one, the lease automatically expires at year 30. At expiration, you do not automatically lose the house you own, but you must negotiate a fresh 30-year registration with the developer, accept a contractual buyout of the structure from the landowner, or—if no agreement is reached—demolish the building at your own expense to restore the vacant land. [1, 2, 3, 4, 5]

Okaaay. I don't think I will be doing one of those. The developer of the project we lived at, who has done probably a dozen or more projects on the Darkside in recent years, with homes in the projects getting progressively more expensive, sold almost exclusively to foreign buyers. She has scaled back, with foreign buyers disappearing due to the company crackdown. Likely others will, as well, with, perhaps, some pivoting to building more inexpensive homes, geared to the lower incomes of many Thai buyers. We recently sold a home, fairly easily, to a Thai buyer. The price? Under 6MB.

Thanks for the insight — but my question still remains open haha: how are Thai people affording to buy all these new homes?

I live in a development myself in Nonthaburi, in a newly built area where several developers bought massive pieces of land and subdivided them into residential developments. What sold me on it was the suburban, residential feel — it reminded me a lot of my home in the States.

The homes in my development range from roughly 9–14M baht, depending on size, and there are around 150 homes. I’ve seen a few foreigners with Thai wives and kids (fewer than five households), but the vast majority are Thai families. And this is just one development out of many, with developments ranging across a wide range of price points.

What really fascinates me is the lifestyle of some of the residents. My neighbor has the mid-sized house, starting around 10M baht, yet he has three Porsches that are considerably more than the house itself. Another neighbor has a Bentley and a Range Rover, which again far exceed the value of his home.

On a side note, something else I find interesting is that Hi-So Thais seem to really love SC Asset properties. I suspect there may be something going on with the perceived value or reputation of the brand, especially given its connection to the Shinawatra family. You can walk into some SC Asset developments and see Lamborghinis and Ferraris like they’re the norm. SC Asset also seems to command a premium compared with some other developers. But that’s probably a conversation for another post 😂.

If you’re looking to buy a home, one thing I’ve noticed from my experience is that almost all the developments are very bare-bones.

When you buy the house, it essentially comes with a base finish — primer walls, basic flooring, fixtures, etc. — and then there is still a lot left to do. Given the prices and what you actually receive, I have to assume the developers have fairly healthy margins because, honestly, a large portion of what you’re paying for is concrete lol. Regardless of the developer, I’ve found that the homes are generally built as cheaply as possible while using finishes and design elements that make them look upscale.

That said, I actually like having a blank canvas and being able to design the house exactly the way I want. The downside is that you’re paying a premium to live in a development while getting a relatively small plot of land compared with buying land yourself and building from scratch — although obviously, that comes with its own set of risks and headaches. I don’t mind having to design my own kitchen, but there’s so much you have to do after purchasing the house, and it can easily add another few million baht on top of the purchase price.

Some of the things I consider essential before even bringing in furniture:

• Glass shower partitions

• Air-conditioning units

• Painting

• Window tint

• Blinds/curtains

• Roof insulation

• Kitchen and built-ins

So while the headline price might say XXM baht, the actual cost of getting the house to a level where you’d consider it “finished” will be significantly higher.

Which brings me back to my original question: where is all this money coming from? 😅

Edited August 16Aug 16 by azfellowbkk

50 minutes ago, newnative said:

how is a foreigner going to buy one of her houses?

If it is in a moobahn it maybe set up like a condo. You own the house but not the land. So foreigner can own 100% of the house.

12 minutes ago, azfellowbkk said:

Thanks for the insight — but my question still remains open haha: how are Thai people affording to buy all these new homes?

I live in a development myself in Nonthaburi, in a newly built area where several developers bought massive pieces of land and subdivided them into residential developments. What sold me on it was the suburban, residential feel — it reminded me a lot of my home in the States.

The homes in my development range from roughly 9–14M baht, depending on size, and there are around 150 homes. I’ve seen a few foreigners with Thai wives and kids (fewer than five households), but the vast majority are Thai families. And this is just one development out of many, with developments ranging across a wide range of price points.

What really fascinates me is the lifestyle of some of the residents. My neighbor has the mid-sized house, starting around 10M baht, yet he has three Porsches that are considerably more than the house itself. Another neighbor has a Bentley and a Range Rover, which again far exceed the value of his home.

On a side note, something else I find interesting is that Hi-So Thais seem to really love SC Asset properties. I suspect there may be something going on with the perceived value or reputation of the brand, especially given its connection to the Shinawatra family. You can walk into some SC Asset developments and see Lamborghinis and Ferraris like they’re the norm. SC Asset also seems to command a premium compared with some other developers. But that’s probably a conversation for another post 😂.

If you’re looking to buy a home, one thing I’ve noticed from my experience is that almost all the developments are very bare-bones.

When you buy the house, it essentially comes with a base finish — primer walls, basic flooring, fixtures, etc. — and then there is still a lot left to do. Given the prices and what you actually receive, I have to assume the developers have fairly healthy margins because, honestly, a large portion of what you’re paying for is concrete lol. Regardless of the developer, I’ve found that the homes are generally built as cheaply as possible while using finishes and design elements that make them look upscale.

That said, I actually like having a blank canvas and being able to design the house exactly the way I want. The downside is that you’re paying a premium to live in a development while getting a relatively small plot of land compared with buying land yourself and building from scratch — although obviously, that comes with its own set of risks and headaches. I don’t mind having to design my own kitchen, but there’s so much you have to do after purchasing the house, and it can easily add another few million baht on top of the purchase price.

Some of the things I consider essential before even bringing in furniture:

• Glass shower partitions

• Air-conditioning units

• Painting

• Window tint

• Blinds/curtains

• Roof insulation

• Kitchen and built-ins

So while the headline price might say XXM baht, the actual cost of getting the house to a level where you’d consider it “finished” will be significantly higher.

Which brings me back to my original question: where is all this money coming from? 😅

What you describe fits me pretty closely--I, too, like a blank canvas to work with. As I said in my earlier post, I'm also in agreement that with the new houses, you are getting the bare, bare minimum in many cases. My spouse's family live in Nonthaburi and we will probably relocate there down the road--that's where we have been house-hunting. Sing out if you come across any developments with single-story homes with pools. All we are seeing is 2-story boxes on small land plots, although one project did have a house model that came with a small sort of plunge pool. We are super-spoiled with the selection of single-story pool villas in Pattaya.

You are so right, also, that what you are buying is largely just the concrete. The new trend I'm seeing is flat-roof homes with the roof made of very inexpensive metal sheets, hidden behind a short wall, usually wth decorative molding of some sort. Looks impressive--especially when they throw in some arches, tall windows, and so on--but basically these homes are just 2-story boxes, very easy and very inexpensive to build. We used this type of roof for our 3-car garage so I know it's inexpensive.

On our outing yesterday, we toured one flat-roof bare box. Three bedrooms upstairs, one small bedroom downstairs. Small living room/dining room/kitchen area. 12MB. Unfinished inside except for the bath vanities. Probably cost no more than 6MB, including the land. No pool.

Over-priced. I know because my spouse and I just built a 5-bedroom/6-bath house, with 3 x 9 pool, all one-story, for under 11MB, which includes the land in a housing project, all loose furniture, custom Thai and Euro kitchens, custom armoires, vanities, and desks in all the bedrooms, drapes, insect screens, appliances, glass shower doors in all the baths, wallpaper, aircons, ceiling fans, landscaping, electric gate, really the works.

Too true about the cars! At our center city Bangkok condo, we see lots of expensive cars in the parking garage--lots more BMWs and the like than Toyotas. I think its because of how Thais perceive they are treated in what they drive. Yesterday when we drove up to one of the fancy developments, my spouse joked that, with the car we were driving, a BYD, we wouldn't get too much respect with the sales people.

As to your question, Google tells me that Thailand has very high household debt compared to other Asian countries, so that might be part of the answer. Greater Bangkok does have a population of around 18 million. Some of the pricey projects aren't too large so, with that many people, developers only need to find a relatively small number of buyers from that 18 million.

1 hour ago, VocalNeal said:

If it is in a moobahn it maybe set up like a condo. You own the house but not the land. So foreigner can own 100% of the house.

None of her projects are in moobahns or set up like a condo. When we bought, in Thai name, it was a regular house transaction at the Land Office.

That's great, Nonthaburi is a really nice developing area right now. Unless you build your own house here, unfortunately you will not find a single house in development with a pool unless you are buying the larger sized homes in the development which are usually 15+m. The community pool in these developments are nice and should be more than sufficient for cooling down or getting some laps in. I have seen a home or two that built a pool on smaller sized home but you will lose the little front yard you have, if not all.

You know what's funny, the one thing I wish I can change is using metal pluming pipes or even pex. Not sure why pex hasn't picked up here, its much easier to use than measuring and cutting pvc pipe, adding joints, and lasts longer.

Yes, the debt is high but that's why i really want to understand the economics of thais being able to buy these new developments all the time. If they are leveraging and rolling debt, at some point they would have a financial collapse but that does not seem to be the case. There is something at play here I am curious to find out.

Curious to see how your house hunting turns out and what you end up doing.

45 minutes ago, azfellowbkk said:

That's great, Nonthaburi is a really nice developing area right now. Unless you build your own house here, unfortunately you will not find a single house in development with a pool unless you are buying the larger sized homes in the development which are usually 15+m. The community pool in these developments are nice and should be more than sufficient for cooling down or getting some laps in. I have seen a home or two that built a pool on smaller sized home but you will lose the little front yard you have, if not all.

You know what's funny, the one thing I wish I can change is using metal pluming pipes or even pex. Not sure why pex hasn't picked up here, its much easier to use than measuring and cutting pvc pipe, adding joints, and lasts longer.

Yes, the debt is high but that's why i really want to understand the economics of thais being able to buy these new developments all the time. If they are leveraging and rolling debt, at some point they would have a financial collapse but that does not seem to be the case. There is something at play here I am curious to find out.

Curious to see how your house hunting turns out and what you end up doing.

I'll try to keep you posted. We go to Bangkok again tomorrow and plan to do some more looking. I guess I am spoiled rotten with my private pool. I guess I could probably do ok with a community pool--they seem to be mostly deserted during the week in Bangkok.

Money laundering

An oversupply of houses here ,pity they cannot export them to USA and UK where

there is a shortage of housing , the ? is how can Thailand build so many when it

looks like they cannot....

regards worgeordie

A silly question- but why noy buy some land and build your own design and add your preferred amenities? Just a thought

Chinese Jews ❓

They're hardworking and thrifty. 😄

14 minutes ago, L- Lifeline said:

A silly question- but why noy buy some land and build your own design and add your preferred amenities? Just a thought

That's what we did. We looked at moobahn houses and some developments were very nice, but most were in 'secondary' locations away from the center.

We ended up buying land with an old, derelict house on it, near the beach and in the town. Demolished the old house, re-used the nice hardwood features, and had a local architect design our ideal home. The architect also bought the hardwood from an old shophouse that was being demolished, and had the wood restored, so we have a wooden shophouse folding door feature and wood stairway.

The construction was a 2 year slog as I was paying for the build from monthly salary, but the result was worth it.

Yes, it's in her name, which is what I wanted, as I still have property in my old country, and it was built using revenue rather than raiding my savings.

Construction costs were much, much lower than back in the West, and the Missus was a demon project manager, so build quality is good.

But buying in a moobahn would certainly have been a simpler route, although most moobahn houses still need fitting out, which is a significant part of the job and the costs.

With hindsight I'd have bought more land, but at the time I wasn't sure how long I'd be in Thailand, so now looking for a second site, although the Missus says 'never again'.

27 minutes ago, L- Lifeline said:

A silly question- but why noy buy some land and build your own design and add your preferred amenities? Just a thought

We actually are exploring that option. We've built 2 houses in Pattaya and renovated 4 others so we have some experience. We do prefer to be in a gated project and likely in the Nonthaburi area, where all of spouse's relatives live.

There has been massive moo baan develpments along the 7 between Suvarnabhumi and mega Bagna, we bought here 15 years ago, and was not that cheap, they have built at least 20 big moobans since then and are building smaller develpments as land prices are obscene, 2 new ones being built near us prices are 20-40 million, these house are precast and just knocked up like kits no pools or gardens, i noticed a a big one that started about 5 years ago prices were 40-150 miilion lol(thses are 3 stories high with private lift) if that makes a difference, it seems that these developments were aimed at the Chinese investors, i am amazed at the building going on, how can it all be afforded and the cars, even where we live plenty of bmws mercs, porsche on the estate maybe 250 house on our development, i have a 5 year old toyota, and it must be one of the oldest, one thing for sure no one cooks, nothing but a stream of grab delivery drivers, kids are all in private school, see the school transport picking them up when walking my dogs, i simply do not understand it, the debt they must be in even if they are doctors engineers etc

I live in Nonthaburi in a condo with my wife, the condo is not fancy but we fixed up our unit to US standards, it’s a small 2 bedroom 2 bath 64 metre we also bought the studio unit next door and open the wall giving us another 32 metres, so we live small compared to US standards but we have gotten used to the space, we have a lot of Large windows which we replaced with double pane windows which reduced the noise by 50% anyway we looked at houses for sale In Hua Hin, Cha Am area Lots of gated community houses are going in down there but the quality of the new homes are just not up to standards. Am thing buying one that has already been lived in is a better way to go this way the homeowner would had already made the improvements necessary to make it a real home. Many of these new homes being built are bought by investors and rented out long term, we stayed in a pool villa for 100.000 baht a month and we had a car to use and a cook to prepare are meals. Anyway we decided to rent another condo in Cha Am on the beach 50 feet from the water with a spectator view of the beach for 15,000 baht it’s a old building and we did about 100,000 baht to paint, replace bathroom fixtures, buy cooking appliances, pots, pans, etc. It’s not fancy but it’s comfortable we choose this over a house because it was easy we can live both places and shut the door and not worry about someone breaking in while we are gone, also don’t have to worry about building repairs. I think we made the right choice we are in our 70’s so want to go slow about all of our decisions. We want to Enjoy are retirement & each other.

I remember reading an article which said there are 1.6mn unoccupied homes in Thailand...800,000 houses and 800,000 condo units. My wife finally sold (at a loss) a house she bought more than nine years ago and still has a condo which she bought 10 years ago and which has never been rented out or lived in. I suspect there are many people like that, thinking they could make money by either renting out their properties or flipping them. In the end, they do neither and the properties just sit empty for years and years.

I live in Pathum Thani, and yes, there are a lot of houses for sale in the 5-7 market, but they are upping the extras as they are not selling. Who they are really selling to, though, is the people who want a house but are willing to bite the BTS bullet to get a better deal.

We even have condos that when they started developing, were at the 2-5mil and now the latest are 1-6 in the same development

5 hours ago, Kinnock said:

That's what we did. We looked at moobahn houses and some developments were very nice, but most were in 'secondary' locations away from the center.

We ended up buying land with an old, derelict house on it, near the beach and in the town. Demolished the old house, re-used the nice hardwood features, and had a local architect design our ideal home. The architect also bought the hardwood from an old shophouse that was being demolished, and had the wood restored, so we have a wooden shophouse folding door feature and wood stairway.

The construction was a 2 year slog as I was paying for the build from monthly salary, but the result was worth it.

Yes, it's in her name, which is what I wanted, as I still have property in my old country, and it was built using revenue rather than raiding my savings.

Construction costs were much, much lower than back in the West, and the Missus was a demon project manager, so build quality is good.

But buying in a moobahn would certainly have been a simpler route, although most moobahn houses still need fitting out, which is a significant part of the job and the costs.

With hindsight I'd have bought more land, but at the time I wasn't sure how long I'd be in Thailand, so now looking for a second site, although the Missus says 'never again'.

Loved your post--thanks for sharing. Your home sounds wonderful. Had to laugh at your last sentence. My spouse has said 'never again' about five or six times--so far.

There a many more Thais with money than you think and even the middle class locals buy using a 30 year mortgage. Of course you are correct. The debt to income ratio is extremely high, but most don’t seem to care and love to show face. I have a huge house in xxxxxx. I just bought a new Ferrari, or whatever luxury brand makes them look better. Many of the poorer locals have sold their homes and land that they have owned for decades and now have money. I see it with a few of my Thai friends and it makes no sense to me. They also travel anytime they have a chance. I’m sure some of them struggle to pay their bills, but they just don’t seem to worry about tomorrow. Others have great jobs or family businesses that support themselves and their families. I built a large house and paid as I was building it. Sure, it took a bit longer, but we didn’t want a mortgage payment. I still love it 20 years later, but I’m glad that all my stuff is paid off. No I can’t make as many trips or buy fancy cars, but I grew up in debt and never want that again. My Thai friends call me stingy. Maybe I am frugal, but I don’t have to worry about losing my house or cars. I think that many of these new developments are going to be in trouble, especially those built for the Chinese or really any foreigners, especially around BKK and Pattaya. I guess we will just have to wait and see what happens. Even some of the Thais are now starting to worry. So that’s saying something. But just because it looks like your average Thais living in these big houses, doesn’t mean they are really average.

The Thais we know in Bangkok are all earning 200,000-400,000 THB per month.

15 minutes ago, Packer said:

200,000-400,000 THB per month.

What on earth are they doing to be earning that much per month ???

that's almost as much as rent on a 1 or 2 bedroom flat in London 😋

Edited August 19Aug 19 by johng

44 minutes ago, johng said:

What on earth are they doing to be earning that much per month ???

Business owners, finance, traders.

50 minutes ago, johng said:

What on earth are they doing to be earning that much per month ???

that's almost as much as rent on a 1 or 2 bedroom flat in London 😋

A decent engineer like my brother in law easily commands 250,000 a month.

Part of the problem is that the Cheap Charlie retirees only associate with low paying Thais and think that the whole of Thailand is like that. It isn't.

The bar stool myth then perpetuates until it becomes 'fact'.

The BIL owns a house in Bangkok, a house in Rayong and a durian farm. His wife, my wife's sister, never worked. Amazing what can be done when you don't drink or smoke.

And yes, they are from Isaan.

23 minutes ago, emptypockets said:

Part of the problem is that the Cheap Charlie retirees only associate with low paying Thais and think that the whole of Thailand is like that.

Hey I'm a cheap charlie and associate with low paid Thais but I think they make up the vast majority of Thais..yes there are some super rich billionaires and some that make 400,000 per month but they are far from the norm a small percentage.

Kudos to your brother in law for earning such a good wage.

55 minutes ago, johng said:

Hey I'm a cheap charlie and associate with low paid Thais but I think they make up the vast majority of Thais..yes there are some super rich billionaires and some that make 400,000 per month but they are far from the norm a small percentage.

Kudos to your brother in law for earning such a good wage.

I think there are a lot more well off Thais than you realise.

I know one lady getting around in a Porsche SUV in Isaan, and a couple of other very, very well off business owners in the same small town. We often meet up for a party or whatever. Normal people who associate with normal people, not the hiso attitude at all. All went to school with my wife and remained friends for all their lives. The less well off school friends also party along with us. Very little hiso/ loso discrimination amongst the group that I have experienced even being the only farang in the group.

That's my experience, yours may differ.

15 minutes ago, emptypockets said:

I think there are a lot more well off Thais than you realise.

I know one lady getting around in a Porsche SUV in Isaan, and a couple of other very, very well off business owners in the same small town. We often meet up for a party or whatever. Normal people who associate with normal people, not the hiso attitude at all. All went to school with my wife and remained friends for all their lives. The less well off school friends also party along with us. Very little hiso/ loso discrimination amongst the group that I have experienced even being the only farang in the group.

That's my experience, yours may differ.

Not denying there is also abject poverty in Thailand but many people sleep on the streets in the west as well.