Bangkok: KKP indicates that the Thai real estate market will continue to experience a slowdown for another two to three years.
According to Thai News Agency, KKP reported that the first eight months of 2025 showed the lowest residential property transfers in seven years, highlighting a further weakening of purchasing power. The condo and luxury housing market are particularly concerning due to an oversupply, prompting developers to adjust strategies towards niche markets and smaller projects. Additionally, several hotels are preparing for potential flooding.
Mr. Wisarut Panyapinyopol, the Head of Real Estate Lending at Kiatnakin Phatra Bank Public Company Limited, disclosed that the housing market’s current slowdown is expected to persist for the next two to three years. Key economic factors, such as high household debt and expenses, are pressuring housing demand and affecting home purchase decisions.
The number of residential property transfers nationwide has declined, with financial institutions tightening lending practices. From January to August 2025, residential property transfers decreased by 6% compared to the same period in 2024, continuing a trend from a 15% drop in 2023. This decline has reached a seven-year low due to economic slowdown and natural disasters. Bangkok and its vicinity accounted for the highest proportion of transfers, at 46%. Developers are increasingly focusing on regions like the Eastern Economic Corridor (EEC).
Conversely, the resale home market is growing, particularly in the 3 million to below 7 million baht price range, benefiting from better pricing and accessibility. In 2025, resale home transfers are projected to make up 56% of ownership transfers, surpassing the pre-COVID level of 38%.
Newly launched units in 2025 are expected to decrease to 41,160, a 33% drop with a project value reduction to 240 billion baht. This decline will impact related sectors like furniture, electrical appliances, and construction.
The real estate market is anticipated to continue slowing in 2026. Developers may reduce new project launches, focusing on project value over volume due to oversupply and shifting consumer demand.
Key factors for future monitoring include the economic situation following the anticipated 2026 government transition and potential economic stimulus measures. Effective policies from the new government could boost property transfers. Developers are likely to focus on sustainable, low-carbon projects in line with “Green and Sustainable Living” trends.
The Monetary Policy Committee (MPC) meeting on December 17th may see a policy interest rate reduction, benefiting the real estate sector. However, Thailand’s rate is low, limiting further cuts compared to the US. Despite this, surplus supply and low interest rates present opportunities for buyers.
Mr. Wisarut noted a projected 20% decrease in project loans to entrepreneurs by the end of 2025, aligning with the current market situation. Entrepreneurs are advised to delay land purchases or project launches due to existing inventories and to focus on smaller projects with specific market demands.
Entrepreneurs should assess financial status and patiently await sales slowdowns. Smaller projects are advised to mitigate investment risks by aligning with consumer demands, like proximity to workplaces, schools, and shopping centers.
The Bank’s policy is to grow in line with the economic situation, focusing on existing clients, including leading public companies and SMEs. Project developers and the Bank will collaborate closely, leveraging in-depth market data.
Regarding flooding in southern provinces, 15% of the bank’s loan portfolio has addressed this issue. Natural disaster preparedness includes installing utilities on higher floors and relocating hotel lobbies to mitigate flood risk.