Buyer's market emerges in Thailand as developers struggle

For homebuyers, 2025 presents an opportune moment to buy a house or condominium. Conversely, the outlook for residential developers appears challenging, with a declining trend expected to persist into next year.

Homebuyers will find a market brimming with options as supply significantly outpaces demand.

In Bangkok alone, the Real Estate Information Center (REIC) reports 63,805 condominium units available, totalling 458.4 billion baht in value.

This abundance of inventory creates a stark contrast for developers, who are postponing new condominium project launches to avoid intensifying market competition.

Their immediate focus is on clearing existing inventory, which will, in turn, benefit buyers with opportunities for attractive bargains and promotional incentives.

High-rise condominiums, in particular, are grappling with the lingering ‘aftershocks’ of the Myanmar earthquake in March.

This event has introduced significant uncertainty among potential buyers, prompting some to delay their purchases.

This unforeseen factor threatens to derail the anticipated recovery of the real estate market and poses a major obstacle to future condominium growth.

Analysts now consider the earthquake a substantial negative influence on Bangkok’s condo market in 2025, especially given the existing inventory backlog.

The fallout from the quake has fundamentally reshaped buyer priorities, placing safety and construction quality at the forefront.

Developers now face a critical challenge: they must restore confidence and reassure buyers that their buildings can withstand future seismic activity.

Without successfully addressing these concerns, demand is likely to remain stalled.

Adding to this concern, DD Property, a leading property website, reported a 14-per-cent month-on-month decrease in condominium demand for April, reflecting buyer anxiety following the recent tremor felt across Bangkok.

Conversely, demand for single-detached houses and townhouses saw a month-on-month increase.

However, the outlook for homebuyers remains distinctly positive, driven by a range of appealing factors.

The government’s relaxation of Loan-to-Value (LTV) rules—effective May 1 for one year and two months—is a positive signal for the real estate market, particularly the condominium sector.

Furthermore, the government has launched stimulus packages by reducing the real estate transfer fee to a mere 0.01 per cent from the standard 2 per cent, and the mortgage registration fee to 0.01 per cent from the usual 1 per cent.

The rates apply to properties with a sale price and assessed value not exceeding 7 million baht. The special rates are effective until June 30, 2026.

Prospective homebuyers can also benefit from low-interest housing loans offered by state-related financial institutions, including the Government Housing Bank (GHB) and Government Savings Bank (GSB).

These institutions also provide relaxed lending conditions, such as extended repayment periods and higher loan amounts.

However, the National Housing Authority's (NHA) “Housing for Thais” policy may further disrupt the private sector.

Around 4,000 pilot units are expected to enter the market in mid-2026, with tens of thousands more ready for transfer by year-end.

These centrally located, low-cost units will compete directly with private condos, potentially reducing demand even further.

Many buyers may postpone purchasing decisions in anticipation of these public-sector options arriving from 2026 into 2027, placing additional pressure on the private market.

According to DD Property, while units priced not exceeding 3 million baht account for the majority or 46 per cent of total demand, the segment priced over 10 million baht shows the highest growth rate at 6 per cent month-on-month.

To address these market dynamics, leading analysts recommend key policies.

One suggestion is raising the foreign ownership cap above 49 per cent, coupled with strict regulations for unit prices beyond domestic affordability levels.

For the longer term, the government will need to encourage migration from the inner city to suburban areas by expanding zoning and reducing density in the core.

TTB Analytics, for instance, suggests that the government offer tax incentives to developers who are building in designated outer zones and provide tax benefits to residents who live in suburban areas but work in the city.