Thai developers pull back as land allocation and construction permits plunge

Thailand’s residential property market is showing clearer signs of a supply slowdown, with developers holding back new projects despite an improvement in home transfers and housing loans at the start of 2026.

Data from the Real Estate Information Centre (REIC) showed that land allocation permits and residential construction permits fell sharply across the country in the first quarter, suggesting that developers are taking a more cautious approach as the economy remains fragile and consumer purchasing power has yet to recover fully.

Nationwide, the number of housing units receiving land allocation permits fell to 5,783 in the first quarter of 2026, down 45.7% from 10,652 units in the same period last year. The number of new projects also dropped from 97 to 63.

The slowdown was seen in every region. Bangkok and its surrounding provinces still accounted for the largest share of new permitted units, but the number fell 44.3% to 2,645. The Central region saw the steepest decline, down 59.5%, followed by the West at 49.1% and the South at 46.7%.

Detached houses remained the main product in the market, accounting for 48.3% of all units receiving land allocation permits, or 2,796 units. Townhouses followed with a 26.0% share, or 1,506 units, while semi-detached houses accounted for 20.9%, or 1,208 units.

The figures suggest that developers are still placing more weight on low-rise housing, which is more closely linked to real residential demand than investment-driven purchases.

The slowdown is even more pronounced in residential construction permits. In the first quarter, only 27,870 housing units nationwide received construction permits, down 50.2% from 55,952 units a year earlier.

Low-rise housing accounted for 24,920 units, a drop of 45.5%, while condominium units fell to just 2,950, plunging 71.3%. The decline underlines the continued pressure facing the condominium market, where developers remain cautious due to accumulated unsold stock and a slower-than-expected recovery in purchasing power.

Construction permits fell in every region. The South was hit hardest, with new permitted units down 65.2% to 4,866. The West followed with a 59.2% decline, while the East fell 54.3%, the North dropped 46.2%, and Bangkok and its surrounding provinces declined 43.1%.

The data reflects a broader shift in developer strategy. Instead of rushing to launch new projects, many companies are now focusing on managing existing stock, preserving liquidity and waiting for a clearer recovery in demand.

However, demand-side indicators showed some improvement. Nationwide home transfers rose 11.2% by unit numbers and 3.1% by value, while newly approved housing loans increased 11.1% year on year.

The market is therefore entering a period in which demand is beginning to recover, but supply remains tightly controlled. Developers are expected to remain cautious for the rest of the year, with investment decisions likely to depend on the direction of the economy, interest rates and consumer purchasing power.

Bangkokbiznews