Renting Or Buying Is The Best Decision In 2022

As more people around the country and world get vaccinated and infection rates drop, the consensus appears to be that 2022 will be the start of the post-Covid era. We will begin to increasingly feel like life is returning to normal as travel restrictions are ended and borders reopen. As the economy is restored, job opportunities arise and foreign investment is revived, those interested in the property market may be wondering which option is best, to rent or buy? 

Whether you are relocating to Thailand, want to make a profitable capital investment, or are simply considering upgrading to your own home, there are several issues to consider before making this decision. 

Pricing

It has been a buyers’ market since the start of the pandemic with supply far surpassing demand. The real estate market has stagnated considerably, especially in the luxury segment. With so many options available, this could be a good time to buy for those that can afford it before demand begins to grow. 

Developers have worked hard to make their properties more attractive with amenities such as swimming pools, green areas and on-site retail areas. Buyers now have more options to choose from and can probably negotiate for good discounts on their purchase. There is even an upcoming online auction of over 100 condos that may see buyers attain discounts of as much as 40%. 

Keep in mind that this pricing accounts for just the initial investment. There are ongoing running costs for such properties that you may have to consider relative to your income level. Condo owners have to contribute towards the maintenance of common areas and will often engage a property management company at some fee. Though these costs may be low now, you may find them rise when the economy is revived.

Supply

Though demand for housing fell during the pandemic, so too did supply. Many developers stopped the construction of high-end condos in favour of lower-priced units. There is expected to be a reversal of fortunes in the coming year as REIC figures indicate over 80,000 units are expected to enter the market in 2022 compared to less than 54,000 units this year. 

With a better balance in supply and demand likely to be achieved by the end of the year, these new units will help to revive the market and may drive up prices in 2022. This means if you are interested in buying, there is no better time than now. 

Remote working

Many companies have found that remote working can be conducive to the nature of their business. This means a reduced need for commercial office space, which can be cost-saving for the business. There is also a growing gig economy that allows freelancers to take on work projects from just about anywhere in the world where there is a good internet connection and work from home. With the low cost of living, friendly people and comfortable climate of Thailand, many such gig workers may likely opt to relocate here. 

With more people working from home, many would prefer that the home be their own. a place they can customize to their needs and taste, unlike when renting, which comes with restrictions from the landlord. Opting to buy can be a good option in 2022, be it for yourself or as an investment. Not all gig workers will be able to afford to buy or may want to try the region before buying. This means you will have more potential tenants to choose from as more foreigners seek to make Thailand their new home. 

Foreign investment

Even during the pandemic, industry experts noted that there was still good demand from foreign investors, particularly from China. This may be related to the low cost of living in the country, high annual yield rates, and low infection rates experienced. There has also been renewed interest from investors from Russia, France, the UK, the US, and Germany. The number of investors from these nations is expected to climb further in 2022, resulting in a more balanced demand and supply model. 

Thai law however still restricts how much of properties like condos can be foreign-owned. And foreigners cannot own landed property. However, given how well the country has managed its response to the pandemic and experienced such low infection rates, the country is likely to see increased interest in foreigners looking to retire, study and work in Thailand. This means more buyers and tenants will enter the market. Property investors can seek to capitalise on this likely influx from 2022 by buying now in readiness to sell or rent in 2022. Developments around retirement communities, international schools, and prime transport links are likely to see the most interest. 

Location

When developers shifted focus from high-end condos to low rise developments, they also choose to build in more fringe and affordable locations like Bang Pu, Bang Khae, Lat Krabang, and Thepharak. Many of these units come in under 2 million baht, making for a great bargain for those looking for affordable housing. This is a good opportunity for those in lower-income groups to join the property ladder. Depending on where the properties are, they could still also be located near good hospitals, schools, and transport links. 

However, with the expected reopening of borders with lesser restrictions by 2022, these locations may not be as appealing to foreigners looking to rent. This could be an important consideration for those that are investing in low rise properties while targeting foreign tenants. The gig worker segment may however prove an important target demographic as long as their needs for working from home are met. 

Overall, the decision to buy or rent will primarily depend on whether you have the funds to invest and the choice of housing available in the market. The purpose of the purchase will also matter. If it is for your own use, then it will be simpler to decide what location is best suited to your needs. If buying to rent out, you will need to do some research on the expected demand and rent yields in the areas you intend to invest in. 

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