Thai Condo Market Plummets to 16-Year Low

New launches in Bangkok contract by 94.2% in Q2, falling below COVID-era levels amidst economic uncertainty, high interest rates, and dwindling buyer confidence

 

Thailand's condominium market has hit a staggering 16-year low, with new launches in Bangkok plummeting to just 373 units in the second quarter of 2025.

 

This dramatic 94.2% contraction from the previous year marks the lowest level since 2009, when the market was only just beginning to recover from the subprime crisis, and is even worse than the slump experienced during the peak of the COVID-19 pandemic.

 

According to Colliers Thailand's Research and Communication Department, the dire figures have forced property developers and analysts to urgently re-evaluate their strategies.

 


"This is not merely a seasonal slowdown, but a clear signal reflecting buyer hesitation and cautious decision-making from developers," commented Pattarachai Thaweewong, Director of Research at Colliers International Thailand.


 

He noted that despite a modest recovery in 2022-2023, the market has failed to return to its pre-crisis strength. The extent of the current downturn is particularly striking when compared to the typical Q2 average of 8,000-12,000 new condo launches over the past decade.

 

The sharp contraction in 2025 is attributed to a confluence of economic pressures:

Elevated interest rates are significantly curbing the purchasing power of genuine buyers.

Rising development costs, driven by increases in construction materials and land prices, are squeezing developer margins.

Persistent economic uncertainty and a lack of clear government policy direction are further eroding confidence.

 

Unsurprisingly, many developers have opted to "delay" new project launches, instead focusing on managing existing inventory and shoring up cash flow.

 

 

Despite the challenging landscape, Colliers believes opportunities may emerge in the latter half of the year, particularly if government measures such as interest rate cuts or incentives for first-time homebuyers are introduced.

 


"Today's silence may become tomorrow's momentum, if the timing and conditions are right," Pattarachai suggested.


 

Future development is expected to concentrate on high-demand areas like city centres, locations along mass transit lines, or regions earmarked for government infrastructure projects.

 

The focus will also increasingly shift towards the premium segment, targeting professional executives and foreign investors.

 

For financially prepared buyers, this period could represent a "golden opportunity", as developers are more inclined to negotiate, offering attractive promotions, discounts, and flexible payment terms.

 

However, buyers are urged to prioritise fundamental factors such as the developer's reputation, project delivery reliability, and the long-term potential of the location.

 

 



 

Horizontal Housing Market Also Struggles

The challenges extend beyond condominiums to the horizontal housing market, as highlighted by Pawaran Udomsiri, Deputy Chief Executive Officer of the Residential Business Group at Frasers Property (Thailand).

 

While there are minor positive indicators, such as gradual interest rate reductions and clearer transportation initiatives, a broader view reveals significant headwinds.

 

Soaring household debt, rising non-performing loans (NPLs), reduced liquidity, high living costs, and a declining birth rate are collectively eroding consumer confidence.

 


"Today, consumers at all levels are cautious about spending. Even if they want to own a home, they are still hesitant to buy," Pawaran noted.


 

Frasers Property anticipates the market will continue to contract by approximately 3% annually over the next three years.

 

Townhomes are particularly affected, with a significant number of loan applications being rejected despite genuine demand. Data from October 2024 to April 2025 shows townhome ownership transfers have already fallen by 16% year-on-year.

 

Despite these trends, Frasers Property achieved combined sales of approximately 20 billion baht from both horizontal and vertical developments in the first half of the year, having launched four horizontal projects and planning another four for the second half.

 

While the overall market outlook remains subdued, detached houses are still seen as a strong core product, followed by new premium townhomes like the GOLDINA project, which are designed for buyers with sustained purchasing power seeking long-term value.

 

In response to the shifting market, Frasers Property is implementing a "adapt to survive" strategy, focusing on three key pillars:

Cost reduction for materials: Shifting to high-quality, lower-cost alternative materials.

Reduced construction expenses: For example, moving from precast construction to "on-site wall pouring" for greater cost efficiency, even if it slightly impacts speed and finish.

Targeted new product launches: Developing specific house designs that precisely meet the needs of niche customer segments, recognising that the current market prioritises the "right" home over a quick purchase.

(2025/07/19-00:00)