Thailand's housing market faces uncertainty, new housing sales expected to decline
High household debt and weak purchasing power are stalling Thailand's housing market, with a record-high inventory of unsold units, according to REIC forecasts
The Thai housing market is facing a significant slowdown, with high household debt and diminished purchasing power contributing to weaker demand. The Real Estate Information Center (REIC) has reported record levels of unsold housing stock, reaching 2 trillion baht, as the market grapples with economic uncertainty. The forecast for 2025-2026 indicates a decline in new housing sales. In 2025, 74,544 units are expected to be sold, a drop of 31.2%, with a total value of 472.3 billion baht, down 38.6%. In 2026, the market will see a slight recovery, with sales reaching 75,000 units, a modest increase of 0.6%, and a value of 487.5 billion baht, up 3.2%.
In the first half of 2025, there were 363,813 unsold housing units across the country, a 9.5% increase, with a total value of 2.07 trillion baht, reflecting an 18% rise from the previous period.
Sitthipen Sittatpong, Assistant Director of the Academic Division and Acting Assistant Director of REIC, reported that new housing sales in the first half of 2025 dropped by 49%, with 28,884 units sold, worth 197.7 billion baht, marking a 47.6% decrease. New housing transfers stood at 38,056 units, down 31.3%, with a total value of 207.6 billion baht, a 29.1% drop. Sales of units priced between 400,000 and 500,000 baht fell by 51.5%, impacted by the government's crackdown on scammers, while the under-1-million-baht segment struggled with weak purchasing power among low-income buyers.
Looking ahead to 2025-2026, Sitthipen expects a continued slowdown in both sales and transfers, with the market relying on government measures like transfer fee reductions, mortgage easing, and low-interest loans. However, risks remain, including the likelihood of an economic slowdown in the second half of 2025, liquidity concerns for medium and small developers, a decline in tourism, and the ongoing Thailand-Cambodia border dispute, which has affected foreign demand, especially from Chinese buyers.
Sitthipen advises developers to hold off on new investments, citing six key signs: declining sales and transfers, reduced absorption rates, oversupply, rising loan interest rates, a weakening economy, and lower returns compared to other asset classes. With heightened competition in the rental market, rents are also falling. Developers should focus on diversifying their portfolios, conserving cash, and waiting for more positive market signals before making any new moves.
