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Five industries experienced significant growth this year, while three others were suffering huge contraction, the Ministry of Commerce’s Department of Business Development said on Friday. Department director-general Oramon Sapthaweetham said that the five industries that saw the biggest expansion in the past year were:
  • Tourism (growing 64% year on year), including tour guides, travel agencies, hotels, resorts, spas, and foreign currency exchange;
  • Real estate (up 36%), including real estate developers and real estate agents;
  • Herbal products (up 33%), including herbal medicines, fragrances, and spices;
  • Electrical and electronic installations (up 25%);
  • E-commerce (up 19%).
The three industries that contracted in the past year were:
  • Plastic packaging and chemicals (down 30%), including chemical fertilizers and inorganic compound manufacturing;
  • Offline retail (down 12%);
  • Industries related to fossil fuel (down 5%), including petrol service stations, wholesale of frozen/liquid fuel, and mining.
The department also forecast that in 2024, the following businesses would see growth:
  • Tourism-related businesses, including MICE (meetings, incentives, conferences and exhibitions) hotels, resorts, apartments, guesthouses, tour guides, travel agencies, restaurants, and foreign currency exchange;
  • Health-related businesses, such as personal care products and services, aesthetics clinics, hospitals, specialised clinics, pharmaceutical retail, and senior care;
  • Lifestyle businesses, including pet care, pet food and equipment, recycling, and environmental consulting;
  • Digital businesses, including online retail, digital payment, website development, software development and consulting.
Oramon said the department had collected data from various aspects and agencies, including the number of new business registrations, employment rate, and investment value. External factors such as popularity, government policies and economic indices were also used to weigh the estimates.
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Seven trends can be clearly defined in Thailand’s real estate sector during the auspicious year of the Golden Dragon after a harrowing 12 months of global uncertainties, economic crises, cost of living increases and wars.

  1. With pets considered significant family members and thus deserving of a proper home, more pet-friendly condos will come on the market as developers enhance condominium projects to accommodate fur babies, especially dogs and cats, thus impacting purchase decisions.
  2. An increase in rental condos catering to investor groups seeking properties for rent, especially in locations near universities, schools, malls, hospitals, and industrial estates. This serves both buyers and developers who cater to the rental market and those facing credit rejections, as well as students and working individuals.
  3. Serviced apartments to attract expatriates, businessmen, and tourists returning to work in Thailand due to comparatively lower rental costs than hotel accommodation but offering hotel-like services.
  4. In the luxury housing market, homes priced at more than 20 million baht will see continuous growth in demand among high-end buyers, with an emphasis on space, location, unique designs, and limited supply due to scarce and expensive land.
  5. The tourist real estate market will witness a resurgence due to returning international tourists, notably Russians buying properties in Phuket.
  6. Wellness residences will continue their rapid growth of the last 5 years, as the elderly population surpasses 70 million and consumers focus more on preventive healthcare. This development extends beyond Bangkok to various areas like Khao Yai and Hua Hin, which offer homes catering to the 40-60 age group.
  7. Green buildings, crucial for communities and the environment amidst climate change challenges caused by increased carbon dioxide emissions from economic activities, will be very much in the spotlight. Real estate, which contributes up to 40% of carbon emissions, has seen a surge in large businesses committed to constructing or leasing green buildings for environmental friendliness, resource efficiency, and improved comfort and health for occupants.

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A research and development company is predicting that four factors could negatively impact real estate in 2024: interest rates, labour costs, expenses, and banking.

For 2023, loan rejection rates are expected to rise by 60-65% beyond credit approval, according to Prapansak Rakchaiyawan, the managing director of LWS Wisdom and Solution (LWS), a real estate research and development company in the LPN group.

Risk factors will have an impact on the real estate sector in 2024, including previously noted fluctuations in the global economy and the Thai economy. Prapansak notes a further four risk factors indicated by the company’s research:

  1. Interest rates: Tending to remain at a high level, the rates will have a direct impact on the financial costs of real estate developers and home buyers causing the costs of project development and housing purchases to increase.
  2. Minimum wage increase: If the new government’s policy to increase wages to a minimum of 400 baht per day comes into effect in 2024, it would directly affect the operating costs of real estate operators and would be a factor in causing a house price increase.
  3. Following the increase in energy prices, the price of construction materials tends to increase, in turn increasing construction costs and house prices.
  4. As financial institutions apply stricter judgment in approving housing loans, it would directly affect market purchasing power.

In 2023, there has been a loan rejection rate of 60-65% of the total of loan approval applications. In 2024, the Bank of Thailand will continue a strict monetary policy for considering loans from financial institutions due to the high household debt burden, while the proportion of non-performing housing loans remains high compared to other types of personal loans.

This would have a direct impact on the purchasing power for housing in the market, especially housing with a price lower than 3 million baht per unit, he said. Given these business risk factors, LWS recommends advising real estate entrepreneurs to adjust the sales strategies of developers and residential sellers, instead of acting as financial advisors for people seeking a home to live in or as an investment.

The sector should emphasise financial management advice to customers so that their financial structure would be accepted and considered for loans by financial institutions, said Praphansak. This is particularly true for self-employed customers, who are often rejected for loans from financial institutions as they have an uncertain base income.

If real estate companies could cooperate with financial institutions and provide advice to customers on financial management, they would reduce the risk of being rejected for loans by financial institutions, Praphansak noted. “Real estate entrepreneurs should emphasise planning and making adjustments according to buyer behaviour,” said Praphansak. “This is the key to driving the business to overcome the risks and fluctuations that occur, and maintain sustainable business growth regardless of the risks and uncertainties that arise.”