The industrial and hotel sectors will continue to grow, unlike the condo market which will remain sluggish due to stricter rules for mortgage lending by banks, according to property consultant Knight Frank Thailand.
Marcus Burtenshaw, executive director, occupier strategy and solutions, said the growth of the industrial sector in 2023 was mainly driven by the surge of the electric vehicle (EV) industry.
"The drivers were not only key manufacturing players, mainly from China, but also downstream businesses," he said.
"Data centres, food, electronics and electric appliance industries attracted substantial foreign investment."
As of the end of 2023, industrial land sales totalled 8,867 rai, nearly double the amount sold in 2022.
The cumulative sales rate was 83.1%, marking a growth of 2.4% from 2022, while the average asking price of land rose by 6.1%.
Of the total industrial land sold, 8,059 rai were serviced industrial land plots. The largest amount was in Rayong with 3,674 rai, followed by Chon Buri with 2,339 rai and Chachoengsao with 468 rai.
"Thailand is no longer a low-cost manufacturing base, so we need to enhance our competitiveness to rival key competitors like Vietnam and Malaysia," Mr Burtenshaw said.
He suggested the government create policies to attract investors and focus on quality, services and value-added supply chains.
It should subsidise energy costs or promote renewable energy to help manufacturing gain access to low-cost energy.
Carlos Martinez, director of research and consultancy, said the hotel sector had bounced back to pre-pandemic levels. Room rates per night had significantly increased even though the number of foreign tourists had not yet recovered to the same level recorded prior to the pandemic.
"The average daily rate reached a record high in terms of revenue and profit for hotels compared to the past decade, which saw flat growth," said Mr Martinez. "However, operating costs such as wages and electricity are higher."
To attract workers, hotels needed to offer higher pay, which led to an 8% increase in staff costs, while revenue growth was only 4-5%.
Mr Burtenshaw said the growth of the industrial sector in 2023 was mainly driven by the surge of the electric vehicle (EV) industry, buoyed by a change in consumer preferences. Patipat Janthong
To ensure satisfactory profits, the number of tourist arrivals should recover to the same level as before the pandemic, Mr Martinez said.
Frank Khan, executive director and head of residential, said the residential market in 2024 would still face challenges, particularly with high mortgage lending rejection rates and high development costs.
"Out of the 10 condo units we sold, 5-6 units were rejected by banks for mortgage loans," he said. "This situation was more severe for units priced under 3 million baht. For units priced between 3-6 million baht, rejection rates were 40-50%."
Even low-rise houses faced high rejections as banks conducted more detailed checks on homebuyers. This trend is expected to continue in 2024, particularly in the first half.
Managing director Nattha Kahapana said there were two market segments in the condo sector that would keep growing this year, including high-end condos with affluent target buyers.
"The other segment is condos near universities, driven by strong demand from parents or students seeking rental units," he said.