At the same time, the government has become more serious about controlling the country’s high household debt, which, as of the first quarter of 2025, stood at 88.2% of the country’s GDP, the second highest in Asia after South Korea, according to data from Trading Economics. This has led commercial banks to tighten credit standards, directly impacting the housing market.

The Real Estate Developers Association reported that the average rejection rate for housing loans has reached 40%, and in some cases, it has nearly doubled, especially for projects priced below 3 million THB. The main reasons for rejections include high debt burdens, unstable income, and weak financial histories.

“One analyst stated, ‘This is a very high number. Some publicly listed property developers have become ‘zombie companies,’ unable to repay their loans or trying to restructure their bond payments, and they can hardly sell any of their projects.’”

Mass Market Stagnation, but High-End Market Still Moving

The Thai Stock Exchange’s real estate and construction index has dropped more than 42% from its peak in early 2023, though it has slightly recovered following interest rate cuts. Stocks that have seen sharp declines include WHA Corporation, Land and Houses, and Sansiri.

However, in Bangkok, real estate in locations connected to public transport systems, near hospitals and educational institutions, and within business districts is still performing relatively well.

“For example, in areas near Chulalongkorn University, real estate is still selling, and we are still doing business quite well,” said Poomipak Julmanichoti, Director and Chief Strategy Officer of Sansiri, in an interview with Nikkei Asia.

He added, “Frankly, as long as we continue operating at the current level, we’ll be fine. Therefore, we have no issues with our inventory.” He further pointed out that unsold inventory is mostly found in peripheral areas and in the mass-market segment, with units priced at 3 million THB or lower.

Signs of Recovery Outside Bangkok – FDI Boosts Industrial Property

According to a survey by the Agency of Real Estate Affairs (AREA), certain regions outside Bangkok are showing brighter prospects in the housing market, including Phuket, Pattaya, Koh Samui, Hua Hin, and Sriracha, particularly in the Eastern Seaboard area. Sriracha, in particular, is home to a large Japanese expatriate community, the second largest in Thailand after Bangkok, most of whom work in industrial estates within the Eastern Economic Corridor (EEC).

At the same time, the “industrial and logistics real estate sector” has performed better compared to other sectors, buoyed by strong foreign direct investment (FDI) in 2025.

“The manufacturing sector is relatively strong,” said Marcus Burtenshaw, Head of Strategy and Industrial Solutions at global real estate firm Knight Frank. “We’re seeing very high demand, not only from China but from across the region, including ASEAN, Europe, and the US. The export-oriented manufacturing sector remains quite stable.”

Additionally, the tightening of credit standards has made “second-hand homes,” which are more affordable, an increasingly attractive option. This has led to a slight improvement in the secondary housing market, which typically has lower liquidity. At the same time, it has increased pressure on new housing projects.

Summary:

While certain segments and areas of the real estate market still show promise, the overall market remains sluggish, with properties continuing to be difficult to sell. Sopon Pornchokchai from AREA stated that for the real estate market to stabilize in the long term, Thailand needs political stability, effective property tax reforms for vacant properties to boost liquidity, increased infrastructure investments, and additional measures to reduce household debt.

“If we really want to help the market, the first thing to do is reduce interest rates,” he said.

“Many expect that next year, economic growth may be below 2%, so the property market likely won’t see a major turnaround unless we do more than what we are doing now,” Sopon concluded.