Foreign buyers boost residential market in Northern Thailand

The residential property market in Chiang Mai and Chiang Rai is depending heavily on demand from foreign buyers, particularly from China and Myanmar. Locals, especially those with lower incomes, are finding it difficult to buy homes due to high household debt and limited access to mortgage loans. According to Nawara Sakulnamarka from the Bank of Thailand's Northern Region Office, the purchasing power for many locals remains weak. In the last quarter of 2024, the number of mortgage loans issued in the northern regions dropped by 3.9% compared to the previous year. While this was an improvement over earlier declines, the overall trend shows a struggling market, particularly for lower-priced homes. In terms of property prices, homes costing over 7 million baht saw an increase of more than 10% last year. In contrast, units priced between 3 million to 7 million baht fell by 33%, and those below 3 million baht dropped by 57%. This reflects a change in the types of buyers in the market, with fewer low-income individuals securing mortgage loans. People earning less than 20,000 baht a month made up a smaller portion of mortgage borrowers, decreasing from 29% in 2022 to 22% in 2024. Meanwhile, the share of higher-income borrowers has grown. Looking ahead, the North's property market is expected to remain stable in the early part of this year, partly due to a tourism boost. Developers note that foreign buyers, particularly for condominiums, are showing interest, especially where prices start at 3 million baht. In Chiang Rai, demand for low-rise houses is strong among buyers from Myanmar, often paying in cash. This off-the-books money plays a significant role in supporting the local economy amid declining purchasing power. Buyers are also seeking longer down payment periods as they work towards securing loans, which developers are willing to accommodate.