The result is a disturbing phenomenon Vissarut described as “cascading loan rejections,” where individual properties are sold and returned to the market multiple times as successive buyers fail to secure financing. Some projects have cycled the same unit through 3-5 sales attempts.
With approximately 115,000 unsold units concentrated in the 2-5 million baht range, the townhouse segment faces what analysts describe as an impending “price war.”
Perhaps most surprisingly, the luxury housing segment—once considered a safe haven from mass-market loan rejection issues—is showing clear signs of weakness.
Sales of single detached and semi-detached homes fell 15% in 2025, and an estimated 3,000 unsold units in the 25-50 million baht bracket represent a 5-6 year supply at current absorption rates.
Geographic Divergence
Whilst Bangkok and its vicinity continue to dominate with 46% of national transfers, KKP’s analysis reveals sharp regional variations.
Growth markets include Phuket, Surat Thani (particularly Koh Samui), Prachuap Khiri Khan (Hua Hin), and Nakhon Ratchasima.
Conversely, developers should approach Pathum Thani, Nonthaburi, Chonburi, Chachoengsao, Chiang Mai, and Khon Kaen with caution.
Foreign buyers, whilst seeing overall condominium transfers decline modestly by 4% in 2025, show dramatically different patterns geographically.
Transfers fell sharply in traditional hotspots like Chonburi (-15%) and Chiang Mai (-28%), but surged in Bangkok (+9%), Prachuap Khiri Khan (+66%), and Surat Thani (+220%).
Phuket stands out as a premier growth market, maintaining steady absorption of approximately 1,000 condominium transfers to foreign buyers annually, with 10% year-on-year growth in 2025.
Significantly, the island is witnessing a shift from short-term tourism and holiday homes to long-term family residency, driven by rapid expansion of international schools.
The 2026 Outlook
KKP’s forecast for 2026 anticipates continued contraction, albeit at a slower rate of approximately 6%. Unsold inventory is projected to fall by 6% to around 207,998 units as developers hold back on large-scale launches.
The return of “real demand” buyers will be slow and heavily contingent on tangible economic recovery.
Potential catalysts include government stimulus measures—such as expanded reductions on transfer and mortgage fees or new tax incentives—and infrastructure development.
Key projects to watch include the MRT Orange Line and transformative private-sector developments such as Bangkok Mall and Cloud 11, expected to invigorate zones like Bang Na and Phahonyothin.
KKP projects these will generate demand for mid-tier single-family homes (8-15 million baht) and affordable condominiums (1.5-3.5 million baht).
Strategic Imperatives
Vissarut outlined three critical imperatives for developers.
First, they must fortify financial positions for longer sales cycles, either accepting extended timelines with sufficient liquidity or strategically reducing project sizes.
Second, they must target hyper-specific demand drivers—projects must be anchored to identifiable buyer pools near major office buildings, international schools, or mass transit hubs.
Third, they should prioritise quality over quantity, shifting from large-scale developments to smaller, high-quality projects meticulously designed for well-defined buyer profiles.
“Green and sustainable living” features are rapidly moving from niche preference to market expectation, KKP noted, with low-carbon materials, solar roofs, and smart home technology becoming key differentiators that also align with future regulatory standards.
“Look at your own wallet and see if you can withstand slower sales, then reduce project size appropriately,” Vissarut advised. “And third, if possible, find a location with specific demand.”
On the lending front, project loans to developers are estimated to have declined approximately 20% by year-end 2025, which Vissarut characterised as appropriate given current inventory levels.
For 2026, the bank will focus on existing clients—both large listed companies and experienced SMEs—whilst avoiding aggressive expansion that runs counter to industry conditions.
The mass-market playbook of the past is indeed obsolete.
Success in 2026 and beyond will belong not to the largest or fastest developers, but to the most strategically precise—well-capitalised, agile firms that master niche targeting, geographic divergence, and sustainable quality.
Only these will capture the market’s most profitable opportunities in what promises to be a challenging period for Thailand’s property sector.
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