Market Slowdown in Greater Bangkok
The real estate market in Greater Bangkok is experiencing a significant slowdown, marked by a decline in land purchases, rising housing inventory, and developers focusing on clearing unsold stock to generate cash. This situation represents the worst market conditions in two decades, according to industry experts.
Tritecha Tangmatitham, managing director of Supalai, a residential developer listed on the Stock Exchange of Thailand (SET), noted that this is the first time in his 16-year career that there were no competitors bidding for land plots. During a recent land acquisition meeting, he mentioned that out of 30 plots they were interested in, none had any other companies showing interest. The number of environmental impact assessment reports approved each month has also dropped significantly, from an average of 15 projects to just two, as reported by Mr. Tritecha.
Declining New Launches
According to the Real Estate Information Center (REIC), the pace of new residential supply in Greater Bangkok slowed down during the first quarter of 2025. Sales have been declining since last year, with the number of newly launched residential units dropping to 13,867 units worth 84 billion baht. This represents a decrease of 15.6% in units and 30% in value compared to the previous year. In terms of unit count, this marks the fifth consecutive quarterly decline.
New sales fell by 29.3% in unit terms and 25.6% in value, totaling 11,314 units worth 68.4 billion baht. As a result, the number of unsold units rose to 237,571 with a combined value of 1.45 trillion baht. REIC projected that the time required to sell this inventory would increase to 64 months in the first quarter of 2025, up 60% from 40 months in the same period in 2024.
Debt Forces Land Sales
Pairoj Wattanavarodom, managing director of Eastern Star Real Estate, a SET-listed developer, stated that more reasonably priced land is expected to enter the market next year as some developers either pause or scale back their projects. He explained that some developers are putting land up for sale because they can no longer issue debentures. Their growth has been debt-driven, which is unsustainable. Developers need to focus on operations and speed to generate cash during this crisis, especially if they don’t have recurring income to support them.
The slowdown in investment and new project launches by residential developers has also impacted the construction materials sector. Inno Precast, a manufacturer and distributor of precast concrete, reported that many residential developers requested delivery delays as they navigate weak market conditions.
Worst Period in 20 Years
Mr. Tritecha described the current market as undoubtedly the worst in 20 years. He noted that the market’s peak was in 2017, with 120,000 units sold annually in Greater Bangkok. Today, that number has dropped to 60,000 units per year. While recovery might bring it to 80,000 or 100,000 units, it won’t reach the 2017 level. He mentioned that the 1997 Asian financial crisis was the most severe period for Supalai, but the current situation is not far off.
“The picture today is extremely tough,” he said. “This year combined with 2024 is a very difficult period for the property sector.” The residential market is driven by GDP growth, which has been weak. During the 1997 crisis, the economy contracted severely before bouncing back strongly. However, the current recovery has been tepid, with no clear sign of sustained improvement.
“Interest rates aren’t especially high, but purchasing power is weak due to excessive household debt,” said Mr. Tritecha. “During the pandemic, that was understandable. But now debt levels remain extremely high near 90%, severely limiting buyers’ ability to enter the market.”
Strong Developers Gain
Mr. Tritecha emphasized that the global economic order is shifting, and Thailand has lost much of its competitiveness. Combined with domestic economic issues, this has created a fragile environment. “Financial discipline is crucial during this time. We must stay patient and wait it out,” he said.
He pointed out that while new supply is limited, demand still exists. With declining competition for land purchases, future supply will remain very limited. If his company can survive and continue to operate in this market, the opportunity will be theirs when the recovery comes.
This environment presents a strategic advantage for financially strong developers, as those with healthy financial positions can launch new projects and gain market share. Others may see an opportunity, but without financial strength, they will be unable to seize it in the same way.
