Opinion of developer–owner Kirill Vyalykh
In short: the 2025 tourist flow is falling short of 2024, banks have tightened underwriting for mass-market buyers, and new launches in Bangkok have fallen to multi-year lows. This is not a “price crash,” but a cash-flow crisis for those who build: presales are not converting into mortgages — project finance stalls, IRR melts, phases get pushed back.
What’s happening “by the numbers”
Tourism is stalling. From January 1 to October 12, 2025, Thailand received 25.1 million foreign visitors (–7.54% y/y), and in August the state planner cut the 2025 forecast to ~33 million (vs. 39.9 million in 2019). For income-producing and resort real estate this means less traffic and lower NOI outside “anchor” locations.
Money is looser, but barriers are tighter. On October 8 the Bank of Thailand kept the policy rate at 1.50% (four cuts had already occurred during the year), while the regulator temporarily relaxed LTV to 100% (contracts from May 2025 to June 2026). This helps, but does not break the trend of rejections in the mass segment.
Fees have been cut in a targeted way. Until 30.06.2026, transfer and mortgage registration fees for properties up to THB 7 million are reduced to 0.01% — a measure primarily for Thai citizens.
Households are overleveraged. By the end of Q2 2025, household debt to GDP stood at 86.8% (one of the highest in Asia) — which explains strict bank scoring.
Demand and launches: the market is “on the brakes”
Demand has slipped. In Q1 2025 Bangkok condominiums had a take-up of 18.1% — the lowest point in several quarters; at the same time, mortgage rejections for units < THB 3 million reach 70–80%. Weak purchasing power combined with strict underwriting leads to a thin funnel of real deals.
Launches are at historic lows. In Q2 2025 new condo launches in Bangkok plunged 94% y/y to 373 units (Colliers estimate, the lowest in 15–16 years). An alternative cut from Knight Frank shows only two projects / 405 units — methodologies differ, the direction is the same: developers are hitting pause. Condo title transfers in the capital region were 12,183 (a low of more than 6 years).
Costs aren’t letting go. The construction materials price index in March 2025 was 112.8 (+0.5% y/y): concrete/logistics “eat” the margin, while the end-product price is “sticky” due to weak demand.
Resorts: “islands of resilience.” In Phuket, in H1 2025 average occupancy held around ~79.5% (in luxury & upscale — ~84%), while in a number of other destinations and in Bangkok there is pressure on RevPAR. This is an important fork for product strategy.
Why this is precisely a developers’ crisis, not “just a cooldown”
Every project has a simple “life chain”:
1) Reservation → 2) Mortgage approval → 3) Contract → 4) Construction loan → 5) Construction on schedule.
If 6–7 out of 10 reservations “fall through” due to mortgage rejections, the presales threshold for the bank is not reached. The bank puts loan drawdowns on hold, and the developer:
- either adds discounts and installment plans (the margin shrinks);
- or builds with own cash (cash goes negative, interest “eats” profit);
- or slows the phase (costs for land holding, site maintenance, contractors rise).
This is where the “developers’ crisis” comes from: not because everything collapsed, but because cash flow breaks.
What could help the market (and what we ask from regulators/banks)
Predictable rules. If fee relief and looser mortgage rules last long and transparently, developers plan deliveries and banks plan limits. Stop-start decisions have the opposite effect.
Targeted help for households. As long as families carry high debt, banks will cut approvals. Restructuring of “small” consumer loans and gentler payment schedules from developers increase the conversion from reservation → mortgage.
Tourism quality. Not only the number of tourists matters, but also the share of long-haul markets, MICE, medical and wellness tourism — these are precisely what pull the profitability of resort assets.
Risks and points of resilience
More risk
- Suburban projects without convenient metro/transit.
- Lower ticket price (up to ~THB 3 million), where buyers more often fail bank checks.
- “Second-tier” resorts where occupancy is lower and rental yields don’t match expectations.
More resilient
- The center and hubs near BTS/MRT stations — rental and resale are livelier there.
- Phuket and a few other mature resorts where hotel occupancy holds and investor-buyers look at numbers, not promises.
Conclusion
Today’s Thai market is not a “price crisis,” but a cash-flow crisis for developers. Projects “fall apart” not because of a catastrophic drop in demand, but because of a narrow funnel: many reservations, few approved mortgages, an acute shortage of “live” presales — which means construction and financing stall.
What to do? Acknowledge the tough spots (mass segment without transit, weak resorts), design for real solvency, go to market only when there is confirmed demand, and keep a grip on costs.
For the state and banks the task is also clear: keep predictable relief and carefully treat household indebtedness so that the “bottleneck” in mortgages widens.
If these things are done on time, the market will cross the “narrow bridge” without sharp price drops — and in 12–18 months we will return to normal launch tempos. If not — we face not a loud crash, but a long, sticky stagnation in which only the most disciplined survive.
