Determinants of Foreign Direct Investment in Thailand’s Real Estate Market

Abstract

 Over the past decades, foreign direct investment has contributed positively to Thailand’s economic growth, where a significant part of the investments made are allocated to the real estate sector. Thailand’s real estate market has demonstrated enduring growth, witnessed by a remarkable surge from international buyers. The increase in tourism and attractive investment opportunities has turned Thailand into a preferred destination for foreign investment, which leads to an increase in foreign demand for accommodation. This study aims to explore the key factors that affected foreign direct investment in real estate activities in Thailand from 2008 to 2022 using the time series regression method. The estimation results reveal that market size GDP, condominium price, interest rates, and exchange rates are significant determinants of foreign direct investment into Thailand’s real estate activities, while the number of tourists and labor wages have no impact. Therefore, Thailand should maintain a favorable investment environment, monitor the real estate market to stabilize house prices, control appropriate macroeconomic policies, and strengthen effective regulation of financial institutions and markets to attract more foreign direct investment into the real estate sector.