Northern property market slows new launches as Chiang Mai faces four-year stock overhang

Thailand’s northern housing market is showing signs of a gradual recovery after passing its lowest point, but fragile purchasing power and tight mortgage lending continue to hold back demand and prompt developers to slow new project launches.

The Real Estate Information Center (REIC) of the Government Housing Bank reported that the first-half 2026 housing market in five northern provinces — Chiang Mai, Lamphun, Chiang Rai, Phitsanulok and Nakhon Sawan — remained uneven despite signs of improvement.

New housing supply across the region fell by about 9%, reflecting a shift among developers away from aggressive expansion towards cash-flow management and clearing unsold inventory.

Mana Nimitvanich, director of the REIC, said the market was entering an era of “stock management”, in which developers increasingly needed to turn existing inventory into cash.

Government measures were continuing to provide some support, but high household debt and strict lending standards remained major constraints, meaning the market would need more time to absorb accumulated supply.

Chiang Mai may need more than four years to clear stock

Chiang Mai showed the clearest signs of recovery among the five provinces, particularly in the condominium segment, although low-rise housing in suburban areas remained a concern.

Total housing supply reached 12,715 units in the first half of 2026, up 12.7% from a year earlier, with a combined value of 60.091 billion baht, an increase of 16.3%.

New supply surged 189.4%, while new sales rose 18.5% to a value of 5.79 billion baht, up 23.4%.

Condominium sales increased 49.4%, compared with growth of 9% for housing-estate projects.

Remaining supply stood at 11,353 units, up 12%, with an average monthly absorption rate of only 1.8%.

At that pace, Chiang Mai would need around 50 months, or more than four years, to clear its remaining stock.

Condominiums would take around 39 months to sell out, compared with about 55 months for housing estates.

The figures show that Chiang Mai is not recovering evenly across all segments, with condominiums emerging as the strongest driver.

Chiang Mai evolves into a multi-centre city

Chiang Mai’s growth is also spreading beyond the traditional city centre as the province increasingly develops into a “network city” with several urban centres.

Outlying districts such as San Sai, San Kamphaeng and Hang Dong are emerging as new residential areas with more comprehensive facilities and services.

For condominiums, inner Chiang Mai and the Suthep-Mae Hia area stood out, recording combined sales of 500 newly launched units.

In the low-rise market, San Sai has emerged as a location to watch, with sales rising 62.4% and the monthly absorption rate reaching 2.3%.

Its remaining supply is expected to take around 38 months to clear.

By contrast, housing estates in central Chiang Mai and the Payap University area remain areas of concern because of high accumulated stock, with estimated clearance periods of between 163 and 380 months.

Foreign buyers help revive Chiang Mai condo market

The recovery in Chiang Mai’s condominium market has been supported by foreign demand and buyers seeking an urban lifestyle.

Transfers of new condominiums increased by nearly 50% in terms of units and almost 80% in value, suggesting that the condominium market is moving closer to balance.

The picture is different for upper-end low-rise homes and pool villas.

New supply in these segments has increased while sales have declined, causing unsold inventory to rise.

Developers targeting these markets are therefore likely to shift from accelerating new launches towards a more defensive strategy focused on managing existing stock.

Phitsanulok sales jump 61.4%, but stock remains high

Phitsanulok also showed clearer signs of recovery.

New supply plunged 91.4% from a year earlier, while new sales increased 61.4%.

Total supply stood at 3,577 units, up 8.7%, with a combined value of 14.592 billion baht, an increase of 6.1%.

Remaining supply was still 6% higher.

The average monthly absorption rate improved to 1.2%, reducing the estimated stock-clearance period from 119 months to 78 months.

Central Phitsanulok recorded the strongest performance, with sales of housing-estate units rising 405.9%, or more than fourfold, to 86 units.

The monthly absorption rate reached 3.8%, with remaining stock expected to take about 20 months to clear.

However, conditions remained weak in Bueng Phra and the Naresuan University-Tha Thong area, where absorption rates were just 0.2-0.3% per month.

At those rates, remaining inventory could take between 367 and 452 months to sell out.

Chiang Rai sales improve but inventory remains heavy

Chiang Rai recorded total supply of 3,020 units, up 8.6%, with a combined value of 11.772 billion baht, up 8.9%.

Developers reduced risk by cutting new supply 43.3% to just 68 units, all of them low-rise housing.

New sales rose 22.9%, but remaining supply still increased 7.8% to 2,843 units.

The average monthly absorption rate was only 1%, leaving the province with an estimated 96 months of stock.

Central Chiang Rai recorded 87 new sales, while Mae Sai improved to an absorption rate of 2.3% per month, giving it an estimated clearance period of 37 months.

The airport-Mae Fah Luang University zone remains a concern. Although sales have been relatively consistent, large remaining inventories have kept the absorption rate at only 0.8%, implying a stock-clearance period of about 120 months.

Lamphun clears stock fastest

Lamphun is a smaller market than Chiang Mai, but its absorption figures stand out.

Total supply fell 17.7% to 979 units, valued at 2.55 billion baht.

New supply declined 73% and new sales fell 22.4%.

Despite the weaker sales, remaining supply dropped 16.5% to 795 units.

The average monthly absorption rate reached 3.1%, giving Lamphun the shortest estimated stock-clearance period among the five provinces at just 26 months.

The Lamphun Industrial Estate-Ban Ma area performed particularly well, with an absorption rate of 4% per month and an estimated 19 months needed to clear remaining supply.

The figures suggest that controlling new supply while maintaining sufficient demand can help smaller markets rebalance more quickly.

Nakhon Sawan halts launches as sales remain weak

Nakhon Sawan showed a markedly different pattern.

No new projects were launched during the survey period.

Total supply fell 22.6% to 1,347 units, worth 6.858 billion baht, while new sales plunged 77%.

Remaining supply declined only 2.5% to 1,239 units.

The average monthly absorption rate fell to 1.3%, leaving about 69 months of inventory to clear.

Tha Thong was the best-performing location for housing-estate projects.

The Dreamland area, however, remained under pressure after sales dropped 86.2% and the absorption rate fell to just 0.7%, implying an estimated 139 months to clear the remaining stock.

The situation in Nakhon Sawan therefore reflects more than a lack of new supply. It points to weak local purchasing power that has yet to recover.

Demand remains for 2-3 million baht homes, but credit is the barrier

Homes priced between 2 million and 3 million baht continue to attract demand, but mortgage financing remains a major obstacle.

Strict lending standards mean that many prospective buyers cannot convert their interest into completed transfers.

REIC recommends that developers work with financial institutions earlier in the sales process, including screening customers and arranging pre-approval before accepting reservations.

Developers should also adjust their product mix to better match purchasing power at more affordable price points.

The key question is therefore no longer simply whether people want to buy homes, but whether those prospective buyers can obtain financing.

Second-hand homes grow four times faster than new market

Developers are also facing stronger competition from the second-hand housing market, which is expanding at roughly four times the pace of the new-home market.

Lower prices are a major advantage, making existing homes increasingly attractive while household purchasing power remains weak and mortgage lending stays tight.

The trend is changing the competitive landscape for new housing.

Developers are no longer competing only with one another, but also with second-hand homes offering stronger value at prices buyers can more readily afford.

For smaller developers in particular, creating a clear point of difference and strengthening the value proposition of new projects will become increasingly important.

Source: Krungthep Turakij