In Thailand, research from LWS Wisdom and Solutions (LWS) indicates that over 66% of Gen Z and Gen Y consumers are now opting to rent rather than buy, prioritising flexibility. This supply-demand dynamic creates a compelling "Buy-to-Rent" proposition, particularly for condominiums located within walking distance of mass transit stations where occupancy remains consistently high.
Praphansak Rakchaiwan, chief executive of LWS, notes that this movement aligns with findings from Siam Commercial Bank’s Economic Intelligence Centre (SCB EIC), which indicate a continued decline in property ownership transfers in Bangkok and its surrounding areas.
So, why do the younger generations opt to rent rather than buy?
Flexibility over stability: Grown up in a rapidly changing world with dynamic lifestyles that involve career moves and relocations, Gen Z and Gen Y prefer renting as it offers adaptability, eliminating the burden of long-term mortgage debt.
According to LWS, 66% of young individuals (60% women) prefer renting. Their rental choices are influenced by convenience, affordability, quality surroundings, well-designed communal spaces, and parking availability.Economic uncertainty and financial security: In an era of fluctuating/ irregular incomes, rising living costs and concerns about financial security, younger generations favour renting over homeownership. Renting can help in avoiding significant long-term financial liabilities and maintain greater financial flexibility.
Diverse investment choices: Gen Z and Gen Y have diversified their investments, opting for assets such as stocks, mutual funds, gold and cryptocurrency. These options yield quicker returns compared to property, which may be harder to liquidate.
Developers and investors
This trend creates opportunities for real estate investors. It was highlighted that the “buy-to-let” model is becoming attractive, with rental investments delivering annual returns of 4–9%. Condominiums priced at THB 1–2 million can generate rental income ranging from THB 5,000–10,000 per month.
With low deposit interest rates and high stock market risks, rental properties offer a balance of stable income and low risk. Developers and investors are responding with tailored solutions, including:
Flexible rent-to-own plans: tenants can lease with an option to purchase in the future.
Fixed-price multi-location rentals: designed for those who frequently change neighbourhoods.
Comprehensive services: covering pre- and post-tenancy needs such as moving assistance, cleaning and maintenance.
Renting is generally considered the superior option due to its low upfront costs and flexibility, especially for newcomers/ short-term residents/ foreigners.
However, buying typically becomes more economical only for those committed to staying for at least 5 years or planning to live in Thailand for the rest of their lives. There will be a potential for long-term appreciation and rental income for property owners.
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