Younger Thais delaying home purchases amid low savings, survey finds

The latest DDproperty Thailand Consumer Sentiment Study reveals that the economic slowdown has prompted Generations Y and Z to postpone purchasing homes due to insufficient savings.

“Savings vs Housing Prices” has led many to choose renting. A key reason most consumers opt to rent rather than buy is financial constraints, with more than half (56%) saying they don't have enough savings to purchase property. 

Additionally, nearly 2 in 5 (37%) have decided to save instead, while 36% see no urgent need to buy a home at this time. 

This highlights that most renters remain concerned about managing their financial liquidity amid economic uncertainty. As a result, they are mitigating risks by avoiding home purchases and turning to renting, which better aligns with their financial needs and reduces expenses.

Currently, the perspective on homeownership among younger generations is shifting in line with the "Generation Rent" trend, which suits their lifestyle and avoids long-term financial burdens from buying property. 

Renting also offers greater flexibility if they need to relocate in the future. Nearly 2 in 5 renters (39%) plan to rent for two years before eventually buying a home, while 29% are uncertain about how long they will continue renting, as they need to reassess other factors. Meanwhile, 5% of renters intend to rent for life.

As for rental rates, the most popular range among renters is 5,000 baht a month or less, with 46% opting for affordable housing to suit their financial situation. Following this are rental rates of 5,001-10,000 baht a month and 10,001-15,000 baht a month, making up 32% and 9% of renters respectively.

Millennial (Gen Y) and Gen Z consumers, who are in the early stages of starting families and planning to purchase homes, represent a crucial demographic for the real-estate sector. However, only 37% of consumers plan to move out of their parents’ homes within the next year, while more than 3 in 5 (63%) have "no" immediate plans to move out. 

The reasons include wanting to care for their parents (43%), intending to inherit their parents’ home (28%), and not having enough savings to buy or rent their own place (27%). 

This reflects the financial challenges that prevent younger generations from being able to afford homeownership, one of the fundamental needs for human well-being.

Although economic challenges have impacted the home-buying or condo-purchasing plans of the younger generation, the desire to own property remains strong. Millennials and Gen Z reveal that when given the choice between buying or renting a home, the majority (82%) prefer to buy, while only 18% are interested in renting.

Over the next year, Millennials and Gen Z consumers plan to focus their finances on family-related expenses (56%), followed by setting aside funds for emergency reserves (54%) to handle future uncertainties, and paying off debts (27%). Only 21% are planning to save money specifically for buying a home.

This aligns with data from the first quarter of 2024 Social Situation Report by the National Economic and Social Development Council (NESDC), which highlights the increasing ageing population in contrast with the declining working-age population in Thailand. 

This has led to the rise of the "Sandwich Generation", individuals who are responsible for both their elderly parents and their own children, creating additional financial burdens. 

The fragile economy further exacerbates the challenges for younger generations in establishing themselves, making homeownership less of a priority compared with previous generations.