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Thai Condominium Market Faces “Perfect Storm”
Sales are expected to see a modest recovery in 2025, with potential growth of 5-10%. Nevertheless, elevated interest rates and strict LTV policies remain significant barriers for middle- and lower-income buyers.
The Thai Condominium Association has characterized 2024 as an especially challenging year for the real estate sector. Rising interest rates, high land prices, and strict Loan-to-Value (LTV) regulations have notably hindered consumer access to mortgages.
Key Takeways
- The Thai Condominium Association forecasts a challenging 2024 for real estate, citing high interest rates, land prices, and strict Loan-to-Value (LTV) rules as barriers to mortgage access. These factors, alongside geopolitical tensions and a strong baht, disproportionately affect the mid-to-lower income housing market, leading to a projected 25% drop in presales and an 8% decrease in property ownership transfers.
- Despite a surge in building completions adding 87 billion baht in transfers during Q4, annual ownership transfers are expected to decline by 5-7%, alongside a 7% decrease in new mortgage lending. While international interest in destinations like Phuket and Bangkok offers some stability, domestic demand remains weak under current lending conditions.
- A modest recovery is projected for 2025, with sales potentially growing by 5-10%. However, high interest rates and stringent LTV policies continue to limit access for middle- and lower-income buyers. The association calls for government intervention to lower interest rates, adjust LTV regulations, and clarify policies on foreign investment and taxation to enhance housing accessibility and economic growth.
These challenges, compounded by geopolitical tensions and a strong baht earlier in the year, have most impacted the mid-to-lower income housing market.
Presale sales for 2024 are projected to decline by 25%, with many segments reaching record lows. Property ownership transfers fell by 8% in the first nine months of the year. However, a surge in new building completions during the fourth quarter added approximately 87 billion baht in transfers, equivalent to the combined total of the previous three quarters.
Despite this, annual ownership transfers are expected to drop by 5-7%, with new mortgage lending also declining by around 7%.
The downturn in 2024 sales is anticipated to affect revenue recognition for the next 1-2 years. However, international buyer interest has provided some stability, particularly in major tourist destinations like Phuket, Chonburi, Chiang Mai, and Bangkok. These foreign purchases have helped offset declining domestic demand, which remains weak due to restrictive lending conditions.
The association predicts a modest recovery for 2025, with sales expected to grow by 5-10%. However, it warns that high interest rates and stringent LTV policies continue to constrain middle- and lower-income buyers, preventing broader access to homeownership for Thai citizens.
To revitalize the market, the association has called on the government to lower interest rates and revise LTV regulations to stimulate domestic purchasing power. Additionally, clearer policies on foreign investment and tax collection could support both economic growth and improved housing accessibility for local buyers.
About the author
National News Bureau of Thailand. Public Relation Department of Thailand
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