Thailand's real estate market crash? Bank executives describe it as the worst situation in a century! Analyzing the reasons behind the local housing market collapse.

In 2025, Thailand's mortgage loans are expected to experience negative growth for the first time, suggesting an imminent collapse?

Media reports indicate that the Thai real estate market is facing an unprecedented crisis, with housing loan growth in 2025 expected to show a negative value for the first time, setting a historical record. This downward trend is rooted in multiple structural issues: weak consumer purchasing power, excessive supply of residential properties, and banks tightening lending standards across all income tiers.

Experts point out that this wave of impact is more severe than the COVID-19 pandemic, as it is not a temporary external event, but rather a deep-seated structural contradiction. The effects of the sluggish housing market are gradually spreading from low-priced residences to mid- to high-priced properties, which may trigger a "price war," eroding the wealth of middle-class families and threatening the stability of the financial system.

DBS Thailand executives: The local real estate market is the worst it has been in a century, and banks are tightening their lending.

The spokesperson of the Bank of Thailand, Chayawadee Chai-anant, stated that the current real estate market "looks worse than ever," with the severity and complexity of the issues deepening. Consumers are increasingly worried about future income prospects, leading to cautious spending and investment, especially when purchasing high-value assets like real estate, resulting in a significant decline in home buying and mortgage applications. Banks are also clearly tightening credit. Previously, the main restrictions were on low and middle-income groups, but now high-income groups are also subject to strict scrutiny.

Yuttachai Teyarachakul, a senior executive at DBS Thailand, described the current real estate market situation as the "worst in a hundred years." He predicts that new mortgage amounts will show "negative growth" for the first time this year. Against this backdrop, banks are gradually shifting their focus to the second-hand housing market, as second-hand homes in the same area are often about 30% cheaper than new constructions.

Unlike the pandemic, this crisis pertains to structural issues: there is a serious oversupply of housing, coupled with insufficient purchasing power among the public, especially in the market for properties priced below 4 million baht. The low-cost housing problem, which was originally concentrated in the segment below 3 million baht, has now spread to the 3–5 million baht range and is even starting to affect high-priced properties like those valued at 10 million baht. CIMB Thai Bank economist Amonthep Chawla believes this reflects that the economic downturn is compressing all income levels comprehensively.

Bangkok real estate agents: Overall presentation is polarized, it's not as bad as a crash.

Regarding the news of the real estate collapse in Thailand, Bangkok real estate agent Ivan believes that the media is exaggerating. He pointed out that this year, the total amount of home loans has seen its first negative growth in 25 years, and the transaction volume of new homes has dropped nearly 40%. On the surface, it seems serious, but there are other factors behind it: many people are delaying home purchases due to a lack of confidence in their income, the approval rate for bank loans is below 40%, and the oversupply of projects in the suburbs has made the numbers particularly poor.

Ivan emphasized that the news often overlooks details. The trading volume fell in the first quarter of this year mainly because buyers are waiting for the government's tax reduction incentives in the second quarter, rather than a real cooling of the market. The impact of banks tightening loans is concentrated on entry-level projects below 3 million baht, and the mid-to-high-end properties in downtown Bangkok have not been significantly affected.

He observed that the housing prices and buying interest in the Bangkok golden zone remain stable, with strong rental demand. Currently, the market is actually polarized: sales in suburban areas and low-priced products are weak, with inventory piling up, but property prices in core locations are steady, offering value retention and rental returns. He pointed out: "The Thai housing market is indeed undergoing a reshuffle, but saying it will completely collapse is really exaggerated. The key lies in where you buy and what kind of community you choose."

Is the Thai real estate market collapsing? Bank executives describe it as the worst situation in a century! Analyzing the reasons behind the local housing market collapse first appeared in Chain News ABMedia.