The Thai Condominium Association has described 2024 as a particularly challenging year for the real estate sector. Rising interest rates, high land prices, and strict Loan-to-Value (LTV) regulations have significantly hindered consumer access to mortgages.
These challenges, compounded by geopolitical tensions and a strong baht earlier in the year, have impacted the mid-to-lower income housing market the most.
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, but a surge in new building completions during the fourth quarter added approximately 87 billion baht in transfers, equal 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, he 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.
Source: NNT
