Global property bubble lessons highlight Thailand’s fragile market
While global bubble risks ease, Thailand faces a “silent bubble” of weak transfers and large unsold stock, with tight credit and high household debt weighing on demand.
Over the past decade, the term “property bubble” has resurfaced in many countries, as global reports show housing prices in major cities such as Miami, Tokyo and Zurich rising far faster than incomes and rents, raising concerns that markets are overheating beyond fundamentals.
Thailand, however, presents a markedly different picture. Rather than runaway prices, the Thai property market is struggling with another trap: ownership transfers that have yet to fully recover despite a large volume of unsold housing stock, especially in the condominium segment.
According to the UBS Global Real Estate Bubble Index 2024, bubble risk in global property markets has declined for a second consecutive year. This followed central banks worldwide keeping interest rates high to curb inflation, pushing prices in key economic hubs towards what the report describes as having “bottomed out” as markets adjust to restore balance.
Even so, cities such as Miami and Tokyo remain in the “high risk” category, as home prices have risen sharply relative to incomes and rents. In other major cities such as London, Paris and Stockholm, risk has eased to a clearly “low” level — a sign that global markets are trying to move away from speculative heat towards economic fundamentals.
Thailand’s “silent bubble”
Thailand’s situation differs from global markets. While other countries worry about bubbles bursting because prices have surged, Thailand is facing what some describe as a “silent bubble”.
Data from the Real Estate Information Center (REIC) shows that the index of new condominium prices in Bangkok and surrounding provinces fell 0.5% year-on-year in the third quarter of 2025, marking the second consecutive quarter of decline. The main driver is a large accumulation of unsold supply.
As sales momentum has weakened, developers have turned to price competition to clear stock, offering promotions that include giveaways valued at as much as 44.3%, alongside a notable rise in schemes that waive ownership transfer fees.
The credit wall
A central factor holding the market back is the credit wall. Household debt in Thailand remains high at around 89-90% of GDP, pushing the mortgage rejection rate up to nearly 40%, particularly for homes priced below 3 million baht — one of the market’s largest segments.
The main reasons are borrower incomes that fall short of banks’ requirements and existing debt burdens that prevent new borrowing. Even the high-end segment — homes priced at 7 million baht and above, previously considered resilient — is now showing signs of slowing in line with economic conditions.
This indicates that Thailand is not facing the speculative price surge seen overseas. Instead, it is confronting a demand dead-end constrained by domestic debt structures.
Policy support as a key stabiliser
A key hope for supporting Thailand’s property market lies in government stimulus measures, particularly the “Quick Big Win” policy that cuts transfer and mortgage registration fees to 0.01% for homes priced at 7 million baht or below.
REIC expects this measure to deliver a clear boost in the fourth quarter of 2025, lifting nationwide ownership transfers by 13.1% and new lending value by 9.5% from the previous quarter.
Although full-year 2025 transfers may still be down around 7.3%, the decline is expected to be less severe than earlier projections. A reduction in the policy interest rate to 1.50% is also seen as another short-term factor easing the burden on buyers.
A cautious 2026
As global markets worry about property bubbles, Thailand may not be at that point — but it is facing structural risks that will require time, policy support and adaptation by developers.
In 2026, the market may not return to a boom. Instead, the sector is likely to move carefully — balancing the urgency of stock clearance, the decision to delay launching new projects, and the search for segments with genuine demand — to prevent a market that is still “holding its breath” from turning into longer-term pressure.
Shifting towards real demand and managing non-performing loan (NPL) risk — with housing-sector NPLs currently at 4.58% — will be a major challenge requiring cooperation across the system before today’s fragility hardens into a full-blown bubble burst.
