Economic Uncertainty, Unsold Inventory, and High Household Debt Weigh on Market
The launch of new residential projects in Greater Bangkok is projected to decline for the third consecutive year in 2025, driven by a growing backlog of unsold units from 2024, economic uncertainty, and elevated household debt, according to Kasikorn Research Center.
Last week, the research center forecasted a 0.7% year-on-year decline in new residential supply for 2025, following approximately 61,450 units launched in 2024. This continues a downward trend, as 2024 saw a 39.5% drop from around 102,000 units in 2023, which had already decreased by 5.2% from 107,000 units in 2022. Notably, the 2022 figure represented a 77% surge from the pandemic-era low of 60,000 units in 2021.
In 2024, all housing categories experienced a decline in new supply, with condominiums seeing the steepest drop at 43%, followed by townhouses (41.5%) and single detached houses (20.8%).
Despite the sharp reduction in new project launches, unsold inventory remains high. The center anticipates that the total number of unsold units will exceed 230,000 units, surpassing the level recorded at the end of 2023.
Weakened Demand Due to Economic Factors
Prasert Taedullayasatit, President of the Thai Condominium Association, highlighted that poor market sentiment throughout 2024 was driven by weakened purchasing power, slow economic growth, and high household debt.
Additional challenges such as geopolitical conflicts, high interest rates, and stringent mortgage lending policies carried over from 2023, making homeownership more difficult. Lending curbs and high mortgage rejection rates further constrained market activity, leading many developers to postpone new project launches.
“The market was further impacted by political transitions in Q3 and widespread flooding in Q4,” said Mr. Prasert. “Additionally, weak investor confidence in the debenture market led several developers to delay their projects.”
Developers Respond by Scaling Back New Projects
Over the past three weeks, five major SET-listed developers—Land & Houses, Supalai, Sansiri, Frasers Property Thailand, and AssetWise—announced plans to launch a total of 85 new residential projects worth 140.9 billion baht in 2025.
These figures represent a 26% decline in the number of projects and a 20% drop in total value compared to 115 projects worth 175.9 billion baht launched in 2024.
Most developers are scaling back their new launches, while some are shifting toward the upper-end market, where purchasing power remains stronger than in the lower-end segment.
Middle- to Lower-Income Groups Struggle with Homeownership
“Thai middle- and lower-income groups are losing the ability to afford homes due to rising living costs and economic pressures,” Mr. Prasert explained. “High interest rates have further weakened purchasing power, while the loan-to-value (LTV) policy has made it more difficult for buyers to secure financing.”
According to Mr. Prasert, Q3 2024 marked the lowest point for the residential market in 13 years, with presales in Greater Bangkok hitting 59.5 billion baht—the lowest level since Q4 2011, during the Great Floods.
Declining Presales Across All Price Segments
By price segment, the sharpest year-on-year decline in presales occurred in units priced below 3 million baht, which plummeted 59%, followed by units priced between 3–5 million baht, down 55%.
Higher price segments also saw declines, including:
7–10 million baht units: Down 33%
5–7 million baht units: Down 24%
10+ million baht units: Down 16-22%
10–20 million baht units: Down 16%
20–50 million baht units: Down 17%
50+ million baht units: Down 22%
Despite ongoing challenges, developers are adjusting their strategies by targeting premium segments, reducing overall project launches, and focusing on projects with higher-value sales potential. However, market recovery remains uncertain, given persistent economic headwinds and financial constraints affecting homebuyers.
With high unsold inventory, subdued demand, and a challenging financing environment, the Greater Bangkok real estate sector faces another tough year ahead in 2025.
Source: Bangkok Post
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