There seems to be a bit of a myth that building costs in Thailand are very low due to cheap material, and particularly cheap labour costs. However, times do change – cost of living and minimum wages have gone up substantially in Thailand over the past 20 years, and cost of raw materials has also risen with the times.
One huge factor that will affect building costs in Thailand is the cost of raw materials coming in from China.
Virtually all raw material costs are set to rise a minimum of 15% in the coming year. Metal materials in particular – zinc, iron, copper, etc. are set to rise over 30% (copper is projected at 38% this year). While this may not affect smaller residential houses to a massive degree, larger condo projects, hotel and commercial projects will certainly see their build cost rise substantially, which will no doubt be passed along to consumers.
Minimum wages in Thailand took a massive jump several years ago from 150 THB to 300 THB per day for basic labour such as construction, factory work, etc. However, skilled workers such as tilers, electricians, plumbers, etc. are now in such high demand that day rates have tripled or more in the past few years with many making upwards of 20 – 30,000 THB per month on full-time salary and even more for day rates.
Of course, you can still build a cheap and cheerful basic home for very little money compared to the west, but with customer expectations rising and demand for better quality of finish, building something to a ‘western standard’ these days does not come cheap.
Some of this is geographically dependent as well. Anyone who has built a home for the wife’s parents in Isaan knows that you could probably build a modest three-bedroom house for around one million THB. But again, labour laws and wages won’t exactly be strictly complied to, and material being used will be about as basic as can be (very simple electrics and plumbing, thin walls, bare minimum columns and footings, etc).
Having had my foot in and out of the construction game here for a number of years, I generally use the following numbers when people ask me broadly about building costs.
For a full renovation of an existing property, you’re looking at around 10,000 THB per sqm for a good finish, or 15 – 20,000 THB per sqm for something pretty special and high-end. For a very basic house build, assume about 15,000 THB per sqm, or up to 25,000 THB per sqm for a very nice finish with all inclusions (pool, nice kitchen, quality fittings, etc).
I always tell people that if costs start getting out of control, it’s generally in three areas: kitchens & appliances, bathrooms and built-in furniture.
Kitchens are generally one of the biggest outgoings of any build or renovation – and the costs vary wildly. A 4-metre kitchen with island could land anywhere from 200,000 THB on the lower-end, up to over 1,000,000 THB pretty quickly. Same goes for bathrooms – sinks, faucets, showers, etc. vary a lot in pricing and can really affect your build cost in a four bathroom house. Again, with built-ins – if you have wardrobes and cabinets in all your bedrooms, custom wardrobes can vary anywhere from 10,000 THB per linear metre to well over 40,000 THB per linear metre. Multiply that by four bedrooms and you can see where costs can explode.
There is an official Thai Appraisal association in Thailand that updates Thailand’s build costs every year – and fair play to them, they actual get quite specific and break down build costs for many types of residential, factory and commercial buildings, and even give their appraised estimates for different levels of build quality. While they give examples for dozens of different build types in Thailand, I thought I’d just give a few examples from the Thai Appraisal Association (costs in THB per sqm):
• A two or three-storey concrete structure shophouse between 6,700 and 9,100 THB per sqm
• A single-storey wood structure house between 10,100 and 13,100 THB per sqm
• A single-storey concrete structure house between 11,300 and 14,800 THB per sqm
• A double-storey concrete structure house between 10,300 and 14,800 THB per sqm
• A low-rise 8-storey residential building between 12,700 and 20,900 THB per sqm
• A 20 to 35-storey residential building between 18,900 and 30,500 THB per sqm
Again, the level of finish for the above is highly subjective, and what is considered a ‘high level of finish’ for some may be quite basic for others.
One thing is for sure, given that these numbers were based on 2020 pricing, we’re sure to see these rise considerably in the coming years. Even with the Covid slowdown this past year, skilled workers are still in very high demand and building costs are continually rising. It will be interesting to see how developers cope with these rising costs, particularly ones who have sold off-plan and are yet to build. Time will tell.
Stu Sutton is managing director of Jomtien Property and Serenity Developments and has worked exclusively in the Pattaya/Jomtien real estate market for 18 years. Please feel free to contact him with any queries, compliments, or good jokes, [email protected] or visit Jomtien Property’s website at www.jomtien-property.com