Housing debt crisis tops 232B baht, signals repayment strain

In a time when the dream of owning a home is increasingly clouded by rising debt, newly released data from the National Credit Bureau sends a troubling signal about the state of Thailand’s housing market. 

In Q1 2025, non-performing loans (NPLs) in the housing sector surged past 232 billion baht, marking a 16.5% increase from the same period last year—a stark reflection of mounting financial pressure at the household level that’s beginning to shake the foundations of the mortgage system.

From Asset to Liability: When Homes Become Debt Traps

Mortgage loans rarely top the list of bad debt concerns. Traditionally, a home is the last asset borrowers are willing to lose. However, the latest figures reveal that the number of non-performing home loan accounts rose to 156,644, up 6.1% year-on-year.

This shift is more than a warning signal—it's a sign of deepening structural fragility in household finances, where even stable, long-term assets like homes are no longer immune to economic stress.

Household Debt Hits 13.5 Trillion Baht—Housing NPLs Still Rising

As of Q1 2025, household debt tracked by the Credit Bureau totalled 13.5 trillion baht, with housing loans making up the largest share at 5.12 trillion baht, a 2.5% year-on-year increase.

While mortgage lending continues to grow, the real concern lies in the rising NPL ratio, which climbed to 8.8%, up from 8.0% a year earlier. The sharp increase in housing-related NPLs is now a major drag on the broader credit landscape, one that can no longer be ignored.

When Income Can’t Keep Up with Debt: Signs of a Growing Housing Crisis

A sharp rise in debt restructuring (DR) before loans turn into non-performing loans (NPLs) is the latest warning sign of deepening financial stress. In Q1 2025, the value of restructured housing loans surged 34.4% quarter-on-quarter, reaching 395.8 billion baht—the second-highest among loan categories, behind auto loans.

This surge indicates that a growing number of borrowers are realising they can no longer meet their mortgage payments and are negotiating relief measures with lenders. While proactive restructuring may help prevent NPLs, it also suggests that many households are approaching the limits of their financial endurance.

Amid the concern, there are some encouraging signs. Short-term delinquent housing loans (SM) decreased by 2.5%, falling from 186.6 billion to 182 billion baht. This points to efforts by both lenders and borrowers to prevent debts from slipping into NPL status.

Additionally, troubled debt restructuring (TDR)—restructuring that takes place after a loan has already turned bad—rose only 3.9%, reaching 299.8 billion baht. Though an increase, it remains relatively stable when compared to external economic shocks.

While the housing debt crisis may not have peaked yet, these developments signal a crucial inflection point for Thailand’s real estate market. It’s a wake-up call for developers, lenders, and policymakers to rethink pricing strategies, loan terms, and project designs—to better align with real household purchasing power.

Otherwise, the home, long seen as a symbol of stability, could become a source of hardship for many. A dream home may turn into a long-term burden.

The rise in distressed mortgage debt this quarter might just be the tip of the iceberg. Beneath the surface lies a deeper risk, fueled by an economy in fragile recovery, soaring living costs, and stagnant incomes.

The challenge now extends beyond managing NPL figures. It’s about building a system where homeownership is possible, without sacrificing financial security.