With unsold housing worth THB1.6 trillion, property sector faces crisis
Thailand’s property sector is grappling with serious challenges as it looks ahead to the next 10 years, with the housing market for units priced below 7.5 million baht contracting across nearly all segments.
Industry experts gathered at a forum titled "Bangkok Chaturathit Property Faces Debt: 10 Years, Thai Real Estate Goes Back to the Same" on Thursday to discuss the current state and future prospects of the Thai real estate market.
Market contraction, unsold inventory
Wichai Wiratkapan, acting director of the Real Estate Information Centre (REIC), reported a slowdown in the overall real estate market.
"The transfer of house ownership priced at no more than 7.5 million baht in the first half of 2024 was negative across almost all price ranges," he said, indicating that recent stimulus measures have had limited effect.
Unsold housing stock has swelled to a staggering value of 1.57 trillion baht, nearly double the 830 billion baht a decade ago. "In terms of the cumulative number of unsold units 10 years ago, it was 250,000 units, increasing to about 355,000 units in 2024, while the cumulative value shot up 830 million baht to 1.57 trillion baht,” he said.
Debt crisis and demographic challenges
Phadet Charoensivakorn, executive vice president of the National Credit Bureau (NCB), highlighted the growing debt crisis, particularly among lower-income groups and younger generations.
"Overall, in 2024, statistics show that the increase in debt was 46% higher than income and the debt per household was about 600,000 baht," he said.
He expressed particular concern for those earning less than 30,000 baht monthly.
"The group that is worrying is those who don’t have income more than 30,000 baht. Debt accounts for 138%, but 13.2% is spent on living expenses and 25% is debt repayment, including the Gen Y group who have more debt from credit cards, home and car loans, etc," he said.
Industry response and strategies
Prasert Taedullayasatit, president of the Thai Condominium Association, projected a 15-20% market contraction for the year.
He called for government intervention, suggesting, "I want the state to join in issuing stimulus measures. By adjusting the criteria for foreigners to buy in the proportion of 75% and zoning from the current 49% in the condo market, as well as finding ways to collect taxes from foreign nominees who buy real estate, which is estimated to be worth up to 1 trillion baht."
Industry leaders are adapting their strategies in response to these challenges.
Keerati Satasook, CEO of CP Land, emphasised the need for new approaches.
"Entrepreneurs must come up with new strategies to explore growing markets such as tourist cities and focus on attracting customers with real needs, not only the upper market," he said.
Uten Lohachitpitaks, Group CEO and chairman of the executive committee of Pruksa Real Estate Pcl, sees potential in targeting specific demographics.
"The market still has high potential, especially for the elderly and those who want to take care of their health. Therefore, the company focuses on designing houses in accordance with and focusing on technology, especially the design of new platforms for home care," he noted.
Looking ahead
As Thailand's real estate sector navigates these turbulent waters, industry stakeholders are calling for a combination of government support, strategic adaptation, and a focus on emerging market segments. The next decade will be crucial in determining whether the sector can overcome its current challenges and return to a path of sustainable growth.
