Three property groups warn 2026 housing market still fragile, urge state action to unlock demand

Thailand’s property market is expected to remain fragile in 2026, with three industry associations calling for urgent government measures to unlock demand.

The market is still being weighed down by weak economic growth, high household debt and tight lending conditions, industry leaders said, warning that this year will not yet mark a full recovery but rather a period of market stabilisation amid multiple uncertainties.

That view was reflected at the seminar Property: A Key Economic Indicator 2026, which brought together industry leaders and economic analysts. Participants broadly agreed that Thailand’s housing market is facing a major turning point, both in terms of demand structure and the wider economic environment.

Economic slowdown hits purchasing power

Assoc Prof Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, said Thailand’s economy in 2026 may grow by only 1-2%, amid risks from energy prices and geopolitical tensions, particularly the conflict in the Middle East, which could raise both energy and transport costs.

Slower economic growth is directly affecting domestic purchasing power, while banks remain cautious about extending credit, resulting in a higher rejection rate for housing loans across many segments.

The situation has forced developers to adopt a more cautious approach, with new project launches declining steadily as companies focus more on clearing existing inventory.

REIC says market slowdown will continue

According to Sitthipen Sittatpong, assistant director of the Real Estate Information Center (REIC), Thailand’s housing market slowed in 2025, with nationwide transfers falling to around 316,000 units, down roughly 9% from the previous year. The total value of transfers also dropped by more than 11%.

The market had initially been expected to stabilise in 2026, but fresh economic and energy risks now suggest that recovery may be delayed by at least another year.

The most resilient segment remains homes priced below 3 million baht, which are mostly bought by genuine owner-occupiers. Meanwhile, the second-hand housing market has gained importance because prices are lower and locations are often more favourable than new projects.

On the supply side, most developers have slowed new launches to reduce risk, causing the number of newly launched projects to fall significantly over the past year.

Three associations say market structure is changing

Prasert Taedullayasatit, president of the Thai Condominium Association, said Thailand’s property market is clearly entering a period of structural transition after facing prolonged pressure from low economic growth, elevated household debt and stricter bank lending.

As a result, domestic purchasing power — especially among first-time buyers and lower- to middle-income segments — has weakened significantly.

This has caused parts of the condominium market to slow, while the upper-end and luxury segments continue to attract demand from high-income buyers and foreign purchasers, whose role has grown over the past two to three years, particularly in Bangkok, Phuket and key economic zones such as the Eastern Economic Corridor (EEC).

He said the market going forward would no longer be driven primarily by the volume of new launches, as in the past, but by projects tailored to more specific demand groups, including foreign investors, affluent buyers and city-centre housing demand.

Soonthorn Sathaporn, president of the Home Builder Association, said the main issue weighing on the housing market was not only weaker purchasing power, but also the rising mortgage rejection rate, particularly in the lower-end housing segment, which represents a major base of the industry.

The key reasons are persistently high household debt and the continued caution of financial institutions in granting loans. As a result, many buyers with genuine housing demand are still unable to qualify for financing.

Soonthorn said that without additional government support measures, such as easing lending conditions or lowering transfer fees, the lower- and middle-income housing segments may take some time to recover in a meaningful way.

Pronnarit Chuanchaisit, president of the Thai Real Estate Association, said the housing market needed to rethink its view of demand, particularly by placing greater emphasis on new buyer groups that still have potential, such as urban workers, junior civil servants and young people just starting their careers.

These groups still want to buy homes, but are finding it difficult to access mortgage finance under current conditions.

He said the government should play a larger role in helping such groups gain access to housing, whether through financial support measures or the development of more affordable housing projects, in order to broaden the buyer base over the long term.

Taken together, the views of the three associations reflect a shared assessment that Thailand’s property market is going through a significant adjustment, shifting from a market once driven mainly by domestic demand to one increasingly reliant on niche demand, including affluent buyers and foreign investors.

At the same time, the lower-end market will still need policy support from the government in order to keep moving forward.

All three associations agreed that government measures remain crucial to any market recovery, especially cuts to transfer and mortgage registration fees, as well as a relaxation of loan-to-value (LTV) rules, which had previously helped support the sector.

The private sector is therefore preparing to submit policy proposals to the new government, covering measures to stimulate domestic demand, attract foreign investors and ease regulations to improve market flexibility.

New opportunity from foreign demand

Although domestic purchasing power remains weak, the condominium market is still being supported by foreign buyers. REIC data show that foreign condo transfers continued to rise last year, accounting for around 14-15% of total unit transfers and about 25% by value.

The main buyer groups remain investors from China, Myanmar and Russia, along with purchasers from Taiwan, the United States and Europe, most of whom are buying in Bangkok, Chonburi and Phuket.

Many developers see geopolitical uncertainty as a potential opportunity for Thailand. The country is still viewed as a safe place in the region and has potential to serve as a second home for foreign investors, especially wealthy buyers from countries facing instability.

That trend has prompted many developers to adjust their strategies, focusing more on upper-end projects and developments aimed at foreign buyers.

Even so, leaders of all three associations agreed that the recovery of Thailand’s property market will still depend heavily on the overall direction of the economy and government support measures.

As a result, 2026 is being seen as a year in which developers must manage risks carefully while adapting their strategies to cope with a rapidly changing market structure.